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Lord & Taylor files for bankruptcy as retail collapses pile up
[NEW YORK] Lord & Taylor, the floundering department store company that traces its roots to 1826, on Sunday became the latest retailer to file for bankruptcy protection as the coronavirus outbreak accelerates the demise of chains that were already teetering.
The chain was acquired last year by the clothing rental startup Le Tote in an unusual $100 million deal. Now Le Tote and Lord & Taylor are both seeking Chapter 11 protection from their creditors in the U.S. Bankruptcy Court for the Eastern District of Virginia.
The companies said in a filing Sunday that they operated 38 locations, which had been temporarily closed since March 2020. A representative for Le Tote and Lord & Taylor did not immediately respond to a request for comment.
Lord & Taylor's origins date back to 1826, when Samuel Lord and George Washington Taylor, both English immigrants, founded a dry goods store in Manhattan's Lower East Side neighborhood. It opened its second store in 1853 and a third in 1860. The famed flagship location on Fifth Avenue in New York opened in 1914 and had a concert hall with a built-in pipe organ and several dining rooms.
But in recent years the chain, which was previously owned by Hudson's Bay, the owner of Saks Fifth Avenue, had been struggling.
Hudson's Bay had sold the chain's iconic New York flagship building to WeWork, and at one point even started selling its goods on Walmart's website.
Then came the Le Tote deal, which was an unexpected gamble from a San Francisco tech startup. Le Tote agreed to pay US$100 million in cash for Lord & Taylor's brand and inventory and take control of 38 stores and the chain's online operation. But Hudson's Bay would continue to own Lord & Taylor's real estate and cover Le Tote's rent at those properties for three years. The deal closed last November.
Since the beginning of May, a number of household name companies have filed for Chapter 11 bankruptcy to shed debt and get out of costly leases, including Neiman Marcus, J Crew, J C Penney, Brooks Brothers and the owner of Ann Taylor and Loft.