By Kellie Ell
with contributions from David Moin
 on August 28, 2019
People walk on a sidewalk along the entrance to Lord & Taylor department store at Garden State Plaza, in Paramus, N.JNew Jersey Retailer Stores, Paramus, USA - 25 Oct 2017

Lord & Taylor has a new home.

Hudson’s Bay Co. is selling the company to San Francisco-based fashion rental subscription service to Le Tote for $75 million in cash, as WWD first reported. 

“We’re excited to have reached an agreement with Le Tote that creates a new model for Lord & Taylor, bringing together fashion rental subscriptions with traditional retail,” Helena Foulkes, chief executive officer of Hudson’s Bay, said in a statement. “Following an extensive review of strategic alternatives, Le Tote’s leadership and innovative approach is the best path forward for Lord & Taylor, its loyal customers and dedicated associates. For [Hudson’s Bay Co.], this transaction builds upon our previous bold actions, further enabling us to focus on our greatest opportunities, Saks Fifth Avenue and Hudson’s Bay.”

Lord & Taylor accounted for about $1.4 billion of Hudson’s Bay’s $9.4 billion in retail sales in fiscal year 2018. Le Tote will acquire the Lord & Taylor brand, including its intellectual property, digital channels, associated inventory and assume operations of its 38 remaining stores. The deal includes a secured promissory note for $25 million, payable in cash after two years. Hudson’s Bay will also receive an equity stake in Le Tote, two seats on the company’s board and some rights as a minority shareholder.

The department store closed its New York Fifth Avenue flagship and a few other unproductive locations this year. But Lord & Taylor still has a reputation for broad and appealing assortments in dresses, a category that works well for rental services, particularly with evening styles. Lord & Taylor also has respectable offerings in tailored clothing and suits, categories that are attractive to the start-up.

Le Tote, which was founded in 2012, allows shoppers to rent apparel and accessories for $79 a month.

Since founding Le Tote, it’s been our mission to push the boundaries of retail,” Rakesh Tondon, Le Tote’s ceo and founder, said in a statement. “We’ve strived to lead the charge in developing innovative, intuitive, value-driven ways for customers to engage and consume. We’re excited to bring Le Tote together with Lord & Taylor, a storied brand that has stood for quality, style and service for nearly two centuries. With this acquisition, we continue our journey in creating the future of retail.”

The deal is expected to close before the start of the 2019 holiday season.

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