Lord & Taylor will launch its first off-price stores beginning next month, becoming the latest entry into a hot sector that continues to capture greater square footage and consumer dollars.
The first “Find @ Lord & Taylor” off-price store will open Nov. 19, at 180 Route 4 East in Paramus, N.J., at the intersection with Paramus Road, WWD has learned. It’s a freestanding building, and fittingly, a former Loehmann’s site. Up to ten Find @Lord & Taylor off-price stores are seen operating in 2016, according to executives from Hudson’s Bay Co., the parent company.
“As you know, our mission is to modernize and contemporize the Lord & Taylor brand. We believe Find @ Lord & Taylor will lift it up. It won’t take away from it. It will help make it even more relevant,” said Jerry Storch, chief executive officer of Hudson’s Bay Co., which operates the Lord & Taylor, Saks Fifth Avenue, Hudson’s Bay and Kaufhof department stores as well as Saks Off 5th and now Find @ Lord & Taylor off-pricers.
“We believe we have the right mix of compelling price points, new locations and easy-to-shop store formats to target a new demographic of shoppers,” said Jonathan Greller, president of outlets for Hudson’s Bay Co. “Our goal is to offer our consumers an exciting merchandise mix at impressive prices.”
The Find @ Lord & Taylor stores will average 30,000 square feet each, and will be stocked with “in-season and on-trend” merchandise priced at up to 70 percent off regular prices. Women’s, men’s, kids’, footwear and home products will be sold, with the offering geared for a younger crowd than typically shops at Lord & Taylor.
Next year’s Find @ Lord & Taylor openings will include converting the four existing Lord & Taylor outlets, which sell 100 percent residual merchandise from firm’s regular stores. Find off-price units will sell a combination of residual merchandise and brand merchandise opportunistically bought by buyers in the market.
There has been some fallout of high-profile off-price players in recent years: Daffy’s, Loehmann’s, and Syms are all gone. Yet aggressive growth by TJ Maxx, Saks Off 5th, Nordstrom Rack, Ross Stores and Bloomingdale’s Outlets more than offsets the loss. In addition, Macy’s introduced its off-price chain, Backstage, last summer, and Filene’s Basement will make a comeback with an off-price Web site.
“Some of the off-price sector is hot among competitors who are experienced and know how to deliver value to the customer,” said Storch. “This is an era where the customer is very heavily focused on value. The off-price sector screams value, and since the Great Recession there has been a very heavy customer focus on making sure they’re getting a deal. But you need to know what you are doing. Like any hot business, the off-price sector attracts many new entrants, some of whom think it’s easy to open an off-price store. We’ve been doing it for 25 years at Saks,” through Off 5th. “We continue to improve the business. Our team is knowledgeable. We have the brand integrity and heritage, since we own Saks Fifth Avenue and Lord & Taylor. We will have great brands in our off-price stores.”
According to Greller, Find @ Lord & Taylor will “leverage 100 percent of our Saks Off 5th team” for buying merchandise and operations such as rolling out stores. “We are not hiring any new buyers or planners,” he said, explaining that the same buyers and operations teams for Saks Off 5th will be utilized for Find. Obviously, Find will be hiring its own store associates and store managers.
Greller said the shopping experience at Find will be different from the one at Saks Off 5th. The brand positioning is different, with Off 5th considered a luxury off-price retailer, while Find @ Lord & Taylor is being positioned between TJ Maxx and Nordstrom Rack, Greller said.
In addition, Find is creating “outsized” kids’ and home areas, he said. “There will be a much higher penetration of those categories at Find.”
He characterized the experience at Find @ Lord & Taylor as providing “a clean, neatly organized, open floor plan, easy to navigate…It will be a treasure hunt experience, but the feel of the store and the brand voice will be different” from Off 5th.
Find will have accents of purple and white, reflecting the Lord & Taylor brand, while Saks Off 5th has accents of black and white, reflecting Saks’ own branding. Saks Off 5th currently operates 89 stores, will have 90 by the end of year and plans 15 to 20 openings a year for the foreseeable future. Saks Off 5th also plans to enter Canada, where it expects to ultimately operate around 25 locations.
The HBC executives said Find will seek suburban shopping center and urban locations, close to population centers, and that there is no hesitation about locating the new format near Lord & Taylor stores, as is the case in New Jersey. “We have two Lord & Taylor stores in Paramus,” not far from where Find will open. “We think that’s great,” Storch said.
He’s confident Find’s first store will be busy. “Everyone in New Jersey knows this location,” Storch said. “It’s a very high-trafficked area, one half mile from Garden State Plaza,” where there happens to be a full-price Lord & Taylor store.
He said Find will serve as a “prospector” for new Lord & Taylor customers. “Shoppers will migrate over time,” from Find to Lord & Taylor.
Between the two chains, Greller sees no potential cannibalization. “We see what’s happening with other retailers that co-exist,” he said, referring to Saks Fifth Avenue and Saks Off 5th. “Find @ Lord & Taylor is going to be an entryway for the Millennials to get an understanding of the Lord & Taylor brand,” he said.
Without citing any specific labels, Greller said that Find will sell some of the same brands sold at Lord & Taylor as well as being “slightly more accessible than what Lord & Taylor has today.”
“We are out there in the market everyday. New product will be bought everyday,” Greller said. “You will see multiple deliveries throughout the week with new and exciting merchandise all of the time. The open floor plan allows us to be adaptable and flexible and showcase something new and exciting every day.”
