Hudson’s Bay Company completes sale of Lord + Taylor
Hudson’s Bay Company (HBC), the Toronto-based owner of Saks Fifth Avenue, announced on Friday that it has closed the sale of its Lord + Taylor brand to fashion subscription service Le Tote for $100 million.
First announced at the end of August, the deal involves an immediate cash payment of $75 million (C$99.5 million) and a further $25 million (C$32.2 million) to be paid two years from now, subject to customary adjustment.
As part of the deal, HBC has acquired an equity stake of around 25% in San Francisco-based Le Tote, as well as the right to designate two directors to the company’s board.
HBC will also continue to pay rent on the 38 Lord + Taylor locations currently in operation for the next three years, after which the company will reassess the store network in consultation with Le Tote. This may lead to HBC recapturing some of these locations for other uses in the future.
As for Le Tote’s plans for Lord + Taylor moving forward, the company’s CEO, Rakesh Tondon, told Bloomberg in September that the two businesses will be integrated, introducing Le Tote’s buy, rent and subscribe options to Lord + Taylor.
According to the same interview, the acquisition brings some 500 additional brands to the Le Tote platform, introducing new categories, such as footwear and cosmetics.
Le Tote will also be introducing rental drop-off points to Lord & Taylor locations, in a similar vein to Rent the Runway’s deal with Nordstrom.
HBC’s decision to sell Lord + Taylor is part of wider efforts being made by the Canadian company as it struggles to adapt to a rapidly changing retail environment. Other measures include shuttering its operations in the Netherlands before the end of the year.
The retail group, which is on track to go private after its special committee accepted the proposal of a group of shareholders last month, announced a net loss from continuing operations of C$462 million (a loss of C$2.51 per share) for the second quarter ended August 3, 2019, on revenues of C$1.85 billion.
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