The Hudson’s Bay Co., continuing to streamline its retail portfolio, is pursuing “strategic alternatives” for its Lord & Taylor division.
The company said Monday that a sale, joint venture or a merger of Lord & Taylor with another company are possibilities, but that no decision has been made. HBC executives also said that strategic alternatives involve the retail operating business of Lord & Taylor. Some of L&T’s real estate could be retained. The division operates 45 stores, mainly in the Northeast.
The Toronto-based retailer has hired the PJ Solomon financial advisory firm to assist in the process.
“This review of strategic alternatives for Lord & Taylor is another example of how we are exploring options to position HBC for long-term success,” said Helena Foulkes, chief executive officer of HBC, on Monday. “Over the last year we have taken bold actions and made fundamental fixes that have resulted in a far stronger more capable HBC, having returned to positive operating cash flow, increased profitability, and having strengthened the balance sheet.”
Although Lord & Taylor has been faltering for several years, it does have certain locations that generate significant volumes, including the recently renovated Manhasset, N.Y., location on Long Island and the Scarsdale, N.Y., unit.
If there is no sale of Lord & Taylor, it’s possible that the retail business shuts down completely, though obviously a sale would be preferred.
Last year, HBC made the decision to close the historic Lord & Taylor flagship on Fifth Avenue in Manhattan. It closed in January and was sold to WeWork, now known as The We Company. Four other L&T stores have been closed. The company said last year that up to 10 locations could close.
Lord & Taylor last year generated 1.4 billion in Canadian dollars, or $1.04 billion.
“Lord and Taylor is a storied brand that has stood for quality, style and service for many years, and serves a highly engaged loyal customer base through a dedicated team of associates,” Foulkes added. “Throughout the review, Lord & Taylor remains committed to serving customers across our stores and digital channel.”
Last year, Foulkes said as part of HBC’s restructuring efforts, “everything is on the table.”
In other downsizings of its retail operations, HBC earlier this year said it would shutter its Home Outfitters chain in Canada this year and close up to 20 Saks Off 5th stores in the U.S. The company is performing “a fleet review” of the 133 Saks Off 5th chain. Saks Off 5th has been yielding poor results for several seasons, even though the off-price sector, led by T.J. Maxx, Ross Stores and Burlington, is among the strongest in the retail industry.
HBC also last year sold off Gilt Groupe to Rue La La.
In Europe, too, HBC has been streamlining. Last year, the company sold off a majority interest in its European retail operations to Signa Holdings, which owns the Karstadt department store chain in Germany, and a 50 percent stake in its European real estate. The sale to Signa led to a merger of the Kaufhof and Karstadt department store chains in Germany.
Also in January, the Saks Fifth Avenue women’s store in Brookfield Place in lower Manhattan was closed. However, overall, the Saks Fifth Avenue business has been outperforming the competition lately. Some sources have speculated that a few top L&T locations could be converted to Saks Fifth Avenue units.
In the fourth quarter of 2018, HBC, hurt by a restructuring charge, posted a fourth-quarter net loss off operations of 226 million Canadian dollars, or $170 million.