Lord & Taylor to Close 10 Stores, Including Fifth Avenue Flagship
The Hudson’s Bay Co., continuing to suffer same-store sales declines across most of its divisions, is trimming costs by closing 10 Lord & Taylor stores, including its flagship location on Fifth Avenue in Manhattan. HBC revealed the planned closures as it reported a net loss of 400 million Canadian dollars, or $308 million, for the first quarter ended May 5, compared to a loss of 221 million Canadian dollars, or $170 million, in the year-ago period.
"We're taking action to reposition Lord & Taylor for improved results and increased profitability," said Helena Foulkes, HBC’s chief executive officer. "We will take advantage of having a smaller footprint to rethink the model and focus on our digital opportunities. The Lord & Taylor flagship on Walmart.com is a great example of this and represents how we're thinking about the entire business.
Total Retail's Take: Perhaps most indicative of Lord & Taylor’s waning fortunes is HBC’s decision to close its iconic flagship store on Manhattan’s upscale Fifth Avenue. In October 2017, HBC agreed to sell the classic building to WeWork for $850 million, but planned to lease back a few floors to keep operating a store. Those plans have changed. In a statement, HBC said: "After evaluating best use scenarios for its New York City Fifth Avenue location, the company has decided not to maintain a presence at this location following turnover of the building to WeWork. Exiting this iconic space reflects Lord & Taylor's increasing focus on its digital opportunity and HBC's commitment to improving profitability."
HBC is exploring other ways to get back to profitability. Earlier this week, for example, the company announced the sale of its flash-sale unit, Gilt Groupe, to Rue La La parent company Kynetic. Gilt generated only 4 percent of HBC's total sales in 2017, and the move is expected to improve the retailer's EDITDA by $10 million to $15 million on an annualized basis.