Photo: Mark Elias / Bloomberg
The luxury department store chain Lord & Taylor, a pioneer in the industry with nearly 200 years of history, has filed for bankruptcy protection along with its owner, Le Tote, the Wall Street Journal reports.
The Chapter 11 application, filed Sunday before the U.S. Bankruptcy Court in Richmond, Virginia, is another indication of the disruptive effect of the COVID-19 pandemic on well-known U.S. retailers. This comes less than a year after Le Tote agreed to buy Lord & Taylor from Hudson’s Bay’s parent company on Saks Fifth Avenue.
Lord & Taylor temporarily closed its 38 physical stores in March, but continued to operate through online channels as restrictions on shopping in non-essential stores came into force during the coronavirus pandemic.
In court documents, the company notes that it will make final sales in Lord & Taylor stores in anticipation of the liquidation of physical stores.
The most lucrative locations will continue to be marketed in hopes of generating interest, said Restructuring CEO Ed Kramer in a statement to the court.
The company is considered the oldest department store in the United States and the first to install an elevator and appoint a woman CEO – Dorothy Shaver, who played a key role in making it an iconic place for American designers in the 40s and 50s. of the last century. The chain dates back to 1826, when Samuel Lord and George Washington Taylor set up shop on the Lower East Side in New York City.
Founded in 2012, Le Tote rents out women’s clothing and accessories for a monthly apartment rent. Supporters of the San Francisco-based company include venture capital companies Andreessen Horowitz, Y Combinator and Google Ventures.
Americans’ spending on clothing is declining, and thousands of retailers are being forced to close their doors, some forever. Since March, a number of large retailers have been forced into bankruptcy, including the Brooks Brothers Group, JC Penney, the Neiman Marcus Group and the J.Crew Group.
But department store chains such as Lord & Taylor, JC Penney and Neiman Marcus were struggling before the pandemic amid declining sales as shoppers shopped more online and turned their preferences to small specialty stores. More than 20 public and large private retail companies in the United States have gone bankrupt since the beginning of the year, more than last year.
Lord & Taylor’s problems began in 1986, when the parent company was acquired by May Co. The new owner added goods at lower prices, made frequent sales and kept investments under strict control, softening the image of a luxury brand of Lord & Taylor.
Hudson’s Bay sold the flagship store to a New York retail company on Fifth Avenue for $ 850 million to WeWork. A few years later, Le Tote bought the entire company for nearly $ 100 million.
Lord & Taylor generated revenue of $ 253.3 million last year and declared bankruptcy with 651 employees and debts of $ 137.9 million.