Every retailer is working overtime to lure the lucrative millennial consumer into stores — and Richard Baker thinks he might have found the answer.
The much-buzzed-about governor and executive chairman of Hudson’s Bay Company made a surprise appearance at the WWD Summit today in New York, just hours after HBC announced it would sell most of its Lord & Taylor flagship to WeWork, which operates co-working and shared office spaces and caters to millennial consumers.
The $850 million sale, which allows a downsized Lord & Taylor to remain in its current space, is part of a larger deal between HBC and WeWork — and comes just days after reports surfaced that Lord & Taylor is teaming with Walmart.com on a major e-commerce deal.
Baker dreamed up the idea with WeWork co-founder Adam Neumann, who is dramatically expanding his own company, now valued at $20 billion, according to Baker.
“We spent a lot of time, in a lot of meetings and a lot of walks around the world talking about the future of retail and the future of millennial behavior,” Baker told the summit crowd. “One of the conclusions we came to is that retail needs to be exciting and interesting, and the center of the community — and a place where people want to be.”
Baker envisions a large crowd of millennial shoppers walking through the revamped Lord & Taylor each day on their way upstairs to WeWork.
As part of the deal, WeWork locations will roll out in HBC locations globally, but there is at least one property that won’t be part of the WeWork deal: the Saks Fifth Avenue flagship. “That’s one of the most productive buildings in the world. We’re spending $250 million to renovate. That store, we want to make bigger.” (It’s clear that Baker wanted to send a message to activist investors who have been pressuring HBC to sell some of its prized real estate, including the Saks space.)