Bankruptcy could be on the horizon for beleaguered retailer Lord + Taylor.
According to a Reuters report, the department store chain is considering filing for bankruptcy protection. It is also weighing other options, such as seeking relief from creditors and securing more funds, says the report. In an email to FN, a representative from the company said it is working through various options but declined to provide further comment.
News of a potential Lord + Taylor bankruptcy follows reports that the century-old retailer is seriously considering a post-pandemic liquidation. Lord + Taylor’s 38 units have been shut since mid-March, with store associates furloughed until the company can reopen its doors.
Earlier this month, Lord + Taylor, owned by fashion rental service Le Tote, saw the bulk of its executive team resign, including president Ruth Hartman. Further, Le Tote confirmed to FN that it had implemented “significant company-wide layoffs” across both Le Tote and Lord + Taylor “with only key employees remaining to preserve the business.”
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Before announcing its plans to sell Lord + Taylor to Le Tote for $75 million in late August, previous owner Hudson’s Bay Company had struggled for some time to revive the mid-tier department store chain amid declining comps. (Also part of the Le Tote-Lord + Taylor merger was a secured promissory note for $CA33.2 million, or $25 million, after two years.)
HBC, which sealed the deal on its own go-private plans in January, memorably shuttered Lord + Taylor’s 100-year-old flagship on New York’s Fifth Avenue in 2019, closed another 10 of its 48 stores and dabbled in a number of omnichannel initiatives, including an unlikely digital partnership with Walmart in 2018.
As the coronavirus pandemic continues to keep most retail stores shut, companies — including Nordstrom and Macy’s — have taken a number of measures to preserve cash flow, including furloughing workers, implementing executive pay cuts and tapping revolving credit lines.
And Lord + Taylor is not the only department store weighing bankruptcy. After struggling in the face of digital disruption and declining foot traffic — coupled with a hefty debt load of over $4 billion — Dallas-based luxury retailer Neiman Marcus Group is said to be days away from filing for Chapter 11 protection. Plano, Texas-based chain J. C. Penney Company is also reported to be mulling bankruptcy as a way to rework its finances and save money on imminent debt payments, but the company has reportedly not made a final decision.