There has been no shortage of news over the past few years concerning shake-ups in the retail and shopping center industries. However, the recent announcement that Lord & Taylor, that venerable fashion department store icon in the U.S. will be purchased for $100 million by a Canadian clothing rental start-up certainly ranks among the most momentous changes. In reality, Lord & Taylor is a relatively small player in the U.S. department store industry today, with only 47 stores in 12 states at present. Recent news concerning a potential bankruptcy filing by Forever 21, with more than 600 stores as of this writing, could have a much more significant impact on the fortunes of U.S. shopping center owners and managers.
It will be interesting to learn in the coming months whether the transaction actually goes through (Le Tote is working to secure financing), and what the implications for Lord & Taylor will be. HBC retains the rights to redevelop selected properties as part of the transaction, which will enable them to generate value from prime locations such as Western Avenue in Washington, D.C. However, the notion that a once premiere department store chain such as Lord & Taylor would be sold for less than 10% of annual sales to a start-up clothing rental company would have been inconceivable just a few years ago. Le Tote will be assuming full operational control of the stores themselves. Will Lord & Taylor continue to sell clothes and accessories, or will it completely transition to a rental company? Will cleaning and shipping be carried out in the stores, or in a warehouse location? And how successfully will a Canadian clothing rental firm succeed in the U.S. market?
Read the Retail Dive article here.