After decades of being starved for capital and appearing antiquated, the company has hired a string of high-profile creative agencies and store designers to develop a new fall-holiday branding campaign, renovate its locations and highlight merchandise changes that have been ongoing for four years and are now being accelerated, WWD has learned.
Joining forces with Lord & Taylor will be advertising guru David Lipman, who has created campaigns for David Yurman, Burberry, Zegna and St. John, and Y&R's BrandBuzz, the research and branding arm of Young & Rubicam.
Randall Ridless, who has designed retail interiors for Burberry, Holt Renfrew, Van Cleef & Arpels, Saks Fifth Avenue and Bergdorf Goodman, will collaborate with the Mancini Duffy architectural and design firm to revamp Lord & Taylor units. Mancini Duffy lists Bloomingdale's, Ian Schrager Hotels, Saks Fifth Avenue, Bliss, Bergdorf Goodman and Calvin Klein among its clients.
"This is only the beginning of a whole series of new and exciting announcements," said Richard Baker, president and chief executive officer of NRDC Equity Partners, which purchased L&T from Federated Department Stores last year for $1.1 billion and is said to be eyeing Saks Fifth Avenue and Barneys New York as possible takeover targets. "NRDC is moving swiftly to meet the challenging and exciting goals we have set for Lord & Taylor. We're dedicated to bringing the most creative minds and people to Lord & Taylor."
A cornerstone of future assortments and marketing will be advancing L&T's historic profile as "the home of American fashion design," Baker said. "It's very important to all of us that Lord & Taylor is the industry leader for American design, and continues to search the country for great talent."
With the influx of the new talent, "we've increased our marketing budget over 20 percent for the foreseeable future, and as far as capital improvements, we are working on plans on a great number of locations," Baker said.
He also hinted that L&T's proprietary brands, notably the Kate Hill bridge sportswear collection and the Context contemporary label, could gain prominence in the assortment, but declined to specify any plans for private labels.Addressing the influx of outside talent, Jane Elfers, L&T's president and ceo, said, "These prestigious and celebrated creative teams represent some of the most innovative minds in the creative design and marketing communities today. Bringing these teams on board is the first of many steps we plan to take in order to continue to energize and refine Lord & Taylor."
The L&T executives acknowledged it's unusual for a retailer to bring in so much outside talent at one time, though L&T is a special case. For many years, the industry perceived the retailer as lacking distinction, failing to play up its heritage, and like other regional chains, having a limited future. L&T stagnated under the formulaic merchandising and promotional strategies of the former May Department Stores, which also overexpanded L&T beyond its northeastern roots.
Four years ago, while still owned by May, L&T started eliminating moderate lines; adding better, bridge and contemporary labels, and curtailing much of the ubiquitous couponing it was known for, to distance itself from other May nameplates. It also began closing far-flung stores. In 2005, May was purchased by Federated and last year Federated sold L&T to NRDC, which is really when perceptions started changing as details emerged about L&T's improving performance, particularly in suburban locations, and its valuable real estate.
"After having spent the past four years repositioning L&T, including the remerchandising of 80 percent of the stores' content and closing 38 underperforming stores, I can say with confidence that with the support of our new owners, we are now well positioned to work with these very talented creative partners to showcase these accomplishments in our upcoming branding campaign and in our new store design," Elfers said. "The thing that has been missing has been capital investment."
Elfers stressed that L&T remains a work in progress. "We continue to upgrade the image and we are not done with the merchandise changes."
Asked if the rebranding would change the store's appeal, Elfers replied, "Lord & Taylor [continues to focus] on the Baby Boomer, but at the same time we have been working hard to be relevant to a new generation of shoppers. The new branding campaign will showcase that.""I think we've found that the consumer that shops Lord & Taylor has a very different perception than the people who have not been in the store," Baker said. "It's important, now that Jane has spent four years improving the product mix, to get the customer into the store. When they come, they like it, and they buy and they stay. We are very confident that with appropriate marketing and promotion and advertising, we can bring more customers in. We would always like to see slightly younger customers in the store, but we are also trying to strengthen the core customer base."
Lord & Taylor is America's oldest department store. Founded in 1826, it currently operates 47 units generating a volume of about $1.4 billion, including about $140 million from the 650,000-square-foot flagship in Manhattan, which should prove to be an ambitious project. From its 11 selling floors, it will be downsized to possibly five or six selling levels, or 250,000 to 300,000 square feet, considering each floor plate is 50,000 square feet. Upper floors will probably become offices. The flagship is considered very overspaced for the volume it generates and is worth an estimated $400 million or more.
Baker has previously said he envisioned $250 million for improvements at the chain, $100 million specifically for the flagship, but that's subject to change as budget plans develop. The Boston and Northbrook, Ill., stores would share in the capital budget; other units in Manhasset, N.Y.; Stamford, Conn., and Chevy Chase, Md., would be high on the list for capital improvements. The budget would cover several years.
This is the first retail assignment for Lipman, who joins L&T as a creative consultant, but he noted, "Everything I've done has been somewhat connected to the retail world. I love things that have great heritage. There are great brands with depth and longevity, and maybe a little dusty, but all you have to do is dig into the archives to know how to modernize the brand." He said L&T would be on the fast track for fall and that the new marketing and advertising would have several components "to make Lord & Taylor the gem it should be."Said Hamish McLennan, global ceo, Y&R, "This is a wonderful opportunity for BrandBuzz. Lord & Taylor is a beloved brand, and the team looks forward to positioning it for the future."
In addition, NRDC has retained Lividini Weisenfeld Partners for marketing and communications, and recently named Cynthia Steffe a consultant. Christina Johnson, who was president and ceo of Saks Fifth Avenue from 2000 to 2003, last fall joined NRDC Equity as partner and managing director of retail and consumer investments. NRDC is believed to be interested in developing a portfolio of retail brands. In February 2006, NRDC closed on its acquisition of Linens ‘N Things, which was purchased with Apollo Management.
NRDC Equity Partners LLC is a joint venture between Robert C. Baker and Richard A. Baker, principals of National Realty & Development Corp., and William Mack and Lee Neibart, partners of Apollo Real Estate Advisors L.P.
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