Lord & Taylor explores bankruptcy: sources
After closing its 38 US department stores amid the virus outbreak, the retailer is also seeking creditor relief
New York
LORD & Taylor is exploring filing for bankruptcy protection after it was forced to temporarily shut all its 38 US department stores in the wake of the novel coronavirus outbreak, people familiar with the matter said on Monday.
It is one of several options that the retailer and its advisers are exploring, which also include trying to negotiate relief from creditors and finding additional financing, some of the sources said, adding that no final decisions have been made.
Fashion rental service startup Le Tote acquired Lord & Taylor last year from Saks Fifth Avenue owner Hudson's Bay Company for C$100 million (S$101 million).
Hudson's Bay kept ownership of some of Lord & Taylor's real estate and assumed responsibility for its rent payments, amounting to tens of millions of dollars a year.
The sources requested anonymity because the deliberations are confidential. Lord & Taylor did not immediately respond to a request for comment.
A NEWSLETTER FOR YOU
Property Insights
Get an exclusive analysis of real estate and property news in Singapore and beyond.
A Le Tote spokesperson said Lord & Taylor is working through various options and declined to comment further. A representative for Hudson's Bay, based in Canada, declined to comment.
Lord & Taylor is not alone among US department store operators forced to weigh bankruptcy in response to prolonged store closures following the novel coronavirus outbreak.
Neiman Marcus Group plans to file for bankruptcy as soon as this week, while JC Penney Company is also considering a similar move, Reuters previously reported.
Lord & Taylor was famous for its holiday window display in its flagship on New York City's Fifth Avenue, but Hudson's Bay sold the building to co-working space operator WeWork in 2019.
Le Tote also owes Hudson's Bay C$33.2 million stemming from a promissory note from the deal.
Le Tote acquired Lord & Taylor to expand beyond e-commerce into brick-and-mortar stores.
It acquired Lord & Taylor's operations, including its merchandise inventory, online business and most of its employees.
As part of the deal last year, Hudson's Bay also secured an ownership stake in Le Tote and two seats on the company's board.
Hudson's Bay representatives have since stepped down from the board, one of the sources said.
Many US businesses grappling with the economic fallout from the pandemic have tapped government funds as part of a US$2.3 trillion stimulus programme. But most retailers have not been eligible for aid.
The National Retail Federation (NRF), which represents department stores and other shops and e-commerce firms, asked the US Treasury last week to include them in government support programmes.
"The Treasury has been a good partner, and we continue to work with them on this and a number of other issues important to our members," the NRF said on Monday. REUTERS
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Property
US mortgage rates jump above 7% for the first time this year
Far East Shopping Centre back on market at unchanged S$928 million asking price
London mansions sold at 30% discount spell gloom for luxury market
Delfi Orchard up for collective sale at S$438 million guide price
US existing home sales drop in March; median price increases
German home building permits tumble 18% in February, extending rout