Lord & Taylor, which was founded nearly two centuries ago on New York City’s Lower East Side and later became a draw to upwardly mobile patrons in downtowns and suburban malls, filed for chapter 11 bankruptcy protection in United States Bankruptcy Court for the Eastern District in Richmond, Virginia yesterday.
“Lord & Taylor had struggled to revive its relevance with shoppers for years. Last year, San Francisco-based Le Tote bought it for $100 million from Canada's Hudson's Bay Co., taking over its 38 locations and hoping to propel the venerable department store toward new, younger shoppers,” she adds.
“Le Tote had hoped to revive the flagging brand by adding makeup subscriptions, try-on boutiques and other services aimed at busy millennial shoppers,” Abha Bhattarai reports for The Washington Post.
It was not good timing.
“The filings comes weeks after two other department store chains -- Neiman Marcus and J.C. Penney -- filed for bankruptcy protection. The pandemic has wreaked havoc on already struggling retailers, and temporarily shuttered thousands of stores and furloughed more than 1 million employees since mid-March,” Bhattarai writes.
The company, which had 651 employees as of the filing, “closed all of its stores temporarily in March as governors ordered residents to shelter in place to combat the spreading virus,” Bloomberg’s Jef Feeley writes for Yahoo Finance.
Some stores began to reopen in late May, a couple of weeks after Reuters’ Jessica DiNapoli reported the retailer was planning to liquidate its inventory as soon as its stores reopened.
“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,” Sapna Maheshwari writes for The New York Times.
“But in recent years the chain, which was previously owned by Hudson's Bay, the owner of Saks Fifth Avenue, had been struggling. The chief executive of Hudson’s Bay had said that the chain was in the fraught ‘middle’ space among retailers -- neither high-end luxury nor discount apparel,” Maheshwari continues.
“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,” she adds.
“As many people have switched to working at home, brands that sell clothes targeted at office workers have had a particularly hard time. Brooks Brothers and the parent company of Ann Taylor are among those that have also filed for bankruptcy,” the AP reports.
“As of July 23, roughly 40 retailers, including big and small companies, had filed for Chapter 11 bankruptcy so far this year. That exceeds the number of retail bankruptcies for all of last year. About two dozen of them have sought bankruptcy protection since the pandemic started,” it continues.
Add the parent company of Men’s Wearhouse and Jos. A. Bank to that list. The publicly traded Tailored Brands Inc., filed for chapter 11 protection Sunday in the U.S. Bankruptcy Court in Houston.
“The clothier has been hit hard by pandemic-related store shutdowns, reporting last month that first-quarter sales were down 60%. Since July 1, Tailored Brands has missed missed interest payments on bonds, slashed its corporate workforce by 20%, announced plans to close up to 500 stores and was notified that it will be delisted by the New York Stock Exchange,” Mike Murphy writes for MarketWatch.
“Tailored Brands said that it reached a restructuring support pact with more than three-fourths of its senior lenders that will slash at least $630 million in debt off its books. Existing lenders will also provide $500 million in bankruptcy financing, allowing the retailer to keep its stores open during the chapter 11 case,” Aisha Al-Muslim reports for The Wall Street Journal.
“The company, which also owns retail brands K&G Fashion Superstore and Moores Clothing for Men, now operates about 1,400 stores and employs about 18,000 people in the U.S. and Canada, down from 19,300 employees as of Feb. 1, according to a securities filing,” Al-Muslim continues.
As for devotees of L&T, “Today’s ‘Store Closing Sale’ signs do not mark the final chapter of Lord & Taylor. Some of its best performing locations, such as Manhasset, Eastchester, Stamford, and Chevy Chase, are still open for business. These popular branches cater to a loyal clientele and these customers are likely to fight and keep their favorite department store alive. Hopefully Lord & Taylor remains able to keep fighting for them,” observes Michael Lisicky for Forbes.