Lord & Taylor to permanently close 19 stores

Dive Brief:

Lord & Taylor, whose parent company filed for bankruptcy on Sunday, released plans to permanently close 19 locations, including six in New York State, three in Connecticut, two each in Maryland and Massachusetts, and one each in Florida, Illinois, Michigan, New Jersey, Pennsylvania and Virginia.
The closures are designed to "maximize the value of its business," according to a press release from owner Le Tote, an online apparel rental site. Le Tote took on 38 of what was then 45 Lord & Taylor locations when it bought the department store last year from Hudson's Bay Co.
At the same time, the company is also now soliciting bids for a going concern sale of both its Le Tote and Lord & Taylor businesses, per the release.

Dive Insight:

Both Lord & Taylor and Le Tote are continuing to run as the company wends its way through Chapter 11, offering "the same superior service and value." But considering the pandemic's effect on retail, that hardly means business as usual.

The company is asking the U.S. Bankruptcy Court in the Eastern District of Virginia to allow it to support its operations during the process, according to the Monday press release. That includes paying employees wages and benefits and conducting store closing sales led by a joint venture of Hilco Merchant Resources and Gordon Brothers.

The company noted that brands like DKNY, Nike, Ralph Lauren and Tommy Bahama will be featured during its liquidation sales. Although consumers continue to be wary of shopping indoors, the sales could entice many whose finances are under pressure as pandemic-related unemployment has surged and sucked the wind out of the economy.

The pandemic could also interfere with the company's ease in selling the retailer itself. Last year, before its sale to Le Tote, Lord & Taylor might have been an appealing acquisition for a department store like Belk, which previously sounded interested in expanding beyond its Southern base, according to Mark Cohen, director of retail studies at Columbia University's Graduate School of Business.

But last month Belk, which is owned by private equity firm Sycamore Partners, turned many of its pandemic-related furloughs into permanent layoffs, saying, "In order to weather the impacts of COVID-19, Belk has had to make some of the most difficult decisions of its 130-year history."