Dive Brief:

• When Lord & Taylor's 38 stores reopen after pandemic-related restrictions ease, they may be running liquidation sales ahead of shuttering permanently. Reuters reported the news on Tuesday, citing unnamed sources.

• The department store, now owned by online apparel rental company Le Tote, is delaying a bankruptcy filing in order to make the most of such sales, but has been in touch with liquidators, according to the report. A company spokesperson declined to comment to Retail Dive on the news.

• Hudson's Bay Co., which last August sold Lord & Taylor to Le Tote for $100 million, held on to some real estate in that deal and may take advantage of a bankruptcy to reassume some leases, Reuters said.

Dive Insight:

The COVID-19 pandemic has been rough on consumer-facing businesses, and fragile retailers like Lord & Taylor are especially at risk.

Le Tote, which had hoped to leverage Lord & Taylor locations to expand its apparel rental operations, early last month announced layoffs of most its workers, at both its namesake company and at Lord & Taylor. Before the pandemic interrupted its plans, the acquisition had held some promise for the nearly 200-year-old department store as well, with hopes of attracting new and younger customers.

Even so, many saw the deal as benefiting HBC, and its real estate ambitions, above all. Lord & Taylor, like HBC's investments in Europe, seemed to be viewed as more of an asset to unload — as with the sale last year of its Fifth Avenue Italianate flagship —​ than a retail turnaround project.

That remains true. In its deal with Le Tote, HBC included a stipulation that HBC and Le Tote as of 2021 will have options to reassess Lord & Taylor's fleet. "This may include HBC recapturing select locations to determine their highest and best use, including possible redevelopment into mixed-use properties with a variety of services, experiences and retail offerings," the companies said at the time.