Less than a year after the Hudson’s Bay Company sold its shares in Lord and Taylor, the US Department store chain has now filed for bankruptcy. It’s unknown how the bankruptcy might affect the Bay because as part of last year’s sale, Hudson’s Bay retained ownership of its Lord & Taylor real estate and, starting in 2021, it has the right to reassess and potentially redevelop these locations. For at least the first three years, Hudson’s Bay has agreed to be responsible for the rent payments owed by Lord & Taylor, or about C$77 million annually, net of distributions.
Lord & Taylor is the latest venerable retail name, with a history stretching back to 1826, that has succumbed to the pandemic by filing for Chapter 11 in Virginia Sunday along with its parent Le Tote.Lord & Taylor follows other merchants into bankruptcy protection including Brooks Brothers and Neiman Marcus. Le Tote, which acquired Lord & Taylor less than a year ago for $100 million, said this morning that it would solicit bids for both its overall business as well as Lord & Taylor and conduct store closing sales as part of the restructuring process. In order to fund operations, the company has obtained court approval to utilize cash from its secured lenders.
The store closing process has begun at 19 of its 38 locations and is being managed by liquidators Hilco Merchant Resources and Gordon Brothers, Le Tote said.