قالب وردپرس درنا توس
Home / Business / Hudson's Bay to sell Lord & Taylor for $ 100 million to Le Tote

Hudson's Bay to sell Lord & Taylor for $ 100 million to Le Tote



Hudson's Bay sells Lord & Taylor to the Le Tote $ 100 million clothing rental subscription service

The deal, announced Wednesday, allows the department store chain to continue operations. Its flagship New York store on Fifth Avenue and other stores closed earlier this year.

Hudson's Bay will be paid $ 99.5 million Canadian dollars ($ 75 million) in cash after the agreement is terminated and a secured $ 33.2 million ($ 25 million) promissory cash will be paid after two year. Hudsons Bay will also receive a stake in Le Tote, two board seats and certain rights as a minority shareholder.

"We are delighted to have reached an agreement with Le Tote to create a new model for Lord + Taylor, which will assemble fashion rental subscriptions with traditional retail," said Hudson's Bay CEO Helena Foulkes. "After a comprehensive review of strategic alternatives, Le Tote's leadership and innovative approach is the best way forward for Lord + Taylor, its loyal customers and dedicated staff. For HBC, this transaction builds on our previous bold actions, enabling us to focus on our biggest opportunities, Saks Fifth Avenue and Hudson's Bay. "

Under the agreement, Le Tote will acquire Lord & Taylor's brand and intellectual property and assume the operation of 38 stores, its digital channels and its inventory.

The company also said that as of 2021

, Hudson's Bay will be allowed to reassess the use of Lord & Taylor locations and recapture certain stores to find out what their best use is. It can also transform stores into "mixed-use properties" with a variety of services, experiences and retail offerings.

For the past two years, Hudson's Bay has taken a number of steps to relax the empire put together by Chairman Richard Baker through deals, including the sale of flash sales site Gilt and European department store Galeria Kaufhof. The deal with Le Tote follows an agreement from Hudson's Bay in 2017 with Work Property Advisors and Rhone Capital to sell the flagship Lord & Taylor in New York. It later left the property completely.

Baker, along with a group of shareholders who collectively own 57% of the company, including Rhone Capital and WeWork Property Advisors, made an offer earlier this year to take the company private. [19659002] That Le Tote, founded as a start-up in 2012, managed to garden the long-standing department store chain, speaks to how far the department stores have fallen. Lord & Taylor's footprint fell to 45 stores from February 2, down from 50 years ago.

Department stores as a sector have struggled to increase sales, as falling foot traffic in shopping malls damaged chains. Earlier this month, luxury chain Barney's New York filed for bankruptcy, and J. C. Penney announced that it was working with restructuring advisors to reduce debt.

Le Tote allows subscribers to rent clothing for $ 79 per month. The deal is also a sign that Le Tote is looking for physical retail outlets to increase its presence and stay in the consumer's seat.

Hudson's Bay and its joint venture, HBS Global Properties, will retain ownership of all owned and owned properties leased by Lord & Taylor as part of the agreement. Hudson's Bay expects to be responsible for approximately $ 77 million in total cash rent annually for these properties, net of distributions, for the first three years of the deal.

Le Tote is still in the process of securing funding for the deal, the companies said. If it is unable to obtain committed funding within 45 days of signing, Hudson's Bay has the right to terminate the agreement.

In fiscal 2018, Lord & Taylor generated $ 1.4 billion, or about 14% of Hudson Bay Company's $ 9.4 billion in retail sales. Hudsons Bay has a market capitalization of approximately $ 1.8 billion. Trading was halted on the Toronto Stock Exchange early Wednesday ahead of the news.

The company stated that it retained PJ Solomon as its financial advisor for reviewing Lord & Taylor's sales.

Retailers such as Gap's Banana Republic and Urban Outfitters have recently jumped into the clothing rental market. According to a report by data analytics company GlobalData, the rental subscription market was valued at around $ 1 billion in 2018 and is expected to grow more than 20% a year, reaching $ 2.5 billion by 2023.


Source link