Lord & Taylor: The End of an Era
- Aug 28, 2020
Following its recent announcement that it would permanently close 24 department stores, Lord & Taylor is now reversing course on its decision to keep 14 locations open, officially going out of business. The news comes almost a month after the firm filed for Chapter 11 bankruptcy and at a time when an increasing number of retailers are also struggling, including J.C. Penney and Neiman Marcus Group.
The move brings an end to a roughly 200-year-old brand, Lord & Taylor having established the country’s oldest department store, with the opening of its first location in 1826 in New York City. The company has since expanded well beyond neighboring cities and states, with 38 locations in Connecticut, Florida, Illinois, New York, New Jersey, New Hampshire, Maryland, Massachusetts, Michigan, Pennsylvania, Virginia and Washington, D.C. The firm initiated final liquidation sales at all of its remaining stores, as well as on its website.
Last November, Le Tote, a startup clothing rental business, purchased Lord & Taylor from the Canadian Hudson’s Bay Co. for $77 million. The new owner attempted to revive the brand by opening a pop-up store in New York City and remodeling its existing stores, with a focus on technology. But the company ran out of cash before it could finish implementing its new vision.
As the pandemic hit the U.S., reports came that the bulk of Lord & Taylor’s senior management had been let go, paving the way for a difficult revival. Moreover, the burden placed by the COVID-19 crisis further exacerbated its already fragile situation.
Thriving times for e-commerce, grocery stores
The pandemic’s negative economic impact on brick-and-mortar retail accelerated the rapid growth of e-commerce, with major parts of the country under lockdown at the beginning of the outbreak. In response to the virus, nearly 4.8 billion square feet of retail space had closed across the country, or almost 55 percent of the total, according to industry intelligence provider GlobalData. In the meantime, most retailers reopened their stores, but continue to feel the effects of the health-induced economic crisis.
Overall, retail sales dropped 8.7 percent in March, the largest decline on record, as customers spent more at grocery stores than anywhere else for the first time ever, according to a Wells Fargo report. And with a record number of Americans having filed for unemployment claims since the start of the pandemic, the retail sector’s recovery seems nowhere in sight.