NEW YORK — The Fifth Avenue flagship of Lord & Taylor is going to sit in limbo for a little while longer.
Hudson’s Bay Co. and WeWork Property Advisors are adjusting their $850 million deal for the building, pushing back the closing date to Nov. 13 from Aug. 10.
WeWork can extend that further, to Jan. 31, and has the option to convert $125 million of the transaction value into an equity interest in the building that would continue to be held by an HBC venture.
The initial deal with WeWork was designed to help HBC reduce its debt load and was revealed in October alongside a $500 million investment in HBC from Rhone Capital.
The Lord & Taylor store was expected to remain on the lower levels of the building after WeWork took the site as its headquarters. But in June, HBC said the famed L&T flagship would be closed entirely. Lord & Taylor is on track to wind down operations on the Fifth Avenue site early next year and will start the process this fall. Results at Lord & Taylor have been disappointing for several seasons and the chain is closing 10 other stores as well as the flagship, although other units will remain open, as will its web site.
HBC has already seen some money out of the WeWork deal, although just a fraction of the total payday that was expected.
WeWork had previously made a $75 million deposit on the building and has made another $25 million payment, which is nonrefundable, with some limitations. A third deposit of $25 million would become due if WeWork pushes back the closing until next year.
“HBC intends to use the net proceeds from the deposit and sale of the Lord & Taylor Fifth Avenue building to reduce indebtedness under its asset-based revolving facility, which currently has 1.2 billion Canadian dollars of borrowing availability, and for general corporate purposes,” the retailer said.
The sale is just a part of the evolving picture at Lord & Taylor.
The retailer just hired Brian Hoke as senior vice president and chief merchant, the chain’s second senior-level hire since Vanessa LeFebvre was named president in May.
“Brian is a seasoned and innovative merchant who will lead the charge in shaping our merchandising approach,” said LeFebvre.
Hoke was formerly group vice president and divisional merchandise manager of men’s sportswear, active and seasonal at Macy’s Inc. He joins Lord & Taylor on Monday, and succeeds David Law, who is leaving the company in mid-August.
Lord & Taylor has “reorganized” its merchandising structure, shifting some of the responsibilities between the buying and planning teams to best support the business. The company also cites the 37,000-square-foot expansion and renovation of the Manhasset, N.Y., branch, which will be complete in September and showcase new brands and a contemporary, glass-enclosed entrance. That store opened in 1941 and was the first department store to open a branch.
In addition, Lord & Taylor is establishing a digital “flagship” on walmart.com. It’s an attempt by Walmart to elevate its fashion appeal and for L&T to reach a much broader audience. Premium brands from Lord & Taylor have been phased into walmart.com. The merchandise is sold and shipped by Lord & Taylor.