Lord & Taylor Sold to Le Tote for $100 Million
Clothing rental service Le Tote will purchase legacy retail brand Lord & Taylor from the Hudson's Bay Company (HBC) for $100 million, reports CNBC. Under terms of the deal, which was announced Wednesday, Le Tote will acquire Lord & Taylor’s brand and intellectual property and assume operations of 38 stores, its digital channels, and its inventory. In addition to the $100 million purchase price, HBC will also receive an equity stake in Le Tote, two seats on its board, and certain rights as a minority shareholder. According to the press release, Le Tote is in the process of securing financing for the full purchase price. If committed financing hasn't been obtained within 45 days following signing, HBC has the right to terminate the agreement.
Total Retail's Take: For a startup clothing rental company to buy a longstanding department store is a testament to the changing winds of retail. Department stores and legacy brick-and-mortar retailers across the industry have been struggling to keep stores open, with many brands trying out new and unusual strategies to compete with fast-growing digitally native startups and direct-to-consumer brands. Le Tote's purchase of Lord & Taylor signals a shift in the industry, and "bring[s] together fashion rental subscriptions with traditional retail," says HBC CEO Helena Foulkes.
This acquisition news comes after a series of changes at Lord & Taylor, including the departure of president Vanessa LeFebvre after just one year in the position; the closing of its flagship Fifth Avenue store location; and the announcement that parent company HBC would be pursuing strategic alternatives for Lord & Taylor in May of this year.
In a blog post on Le Tote's site, Rakesh Tondon, company founder and CEO, wrote: “Since founding Le Tote, it’s been our mission to push the boundaries of retail. We’re excited to bring Le Tote together with Lord + Taylor, a storied brand that has stood for quality, style and service for nearly two centuries. With this acquisition, we continue our journey in creating the future of retail.”