In yet another sign of how the retail industry is being transformed, Le Tote, a clothing rental company, will purchase luxury retailer Lord & Taylor.
The subscription service retailer will pay Hudson’s Bay Company, Lord and Taylor’s owner, $75 million in cash and another $25 million after two years. HBC will also have a shareholder’s stake in Le Tote.
The move is another example of how traditional department stores are having to take innovative, and even unexpected steps, to remain viable. Such strategies are needed to stay afloat at a time when consumers have grown used to the convenience offered by e-commerce giant Amazon, and are increasingly by passing physical stores to shop online.
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“We will create a modern service model combining data-driven rental subscriptions, e-commerce and physical stores, a first in the industry,” HBC CEO Helena Foulkes said in a LinkedIn post. In a separate statement, she added that the sale also will enable HBC to focus more on “our greatest opportunities,” referring to its other two store chains, Saks Fifth Avenue and Hudson’s Bay.
For Le Tote, a San Francisco-based company that allows customers to rent clothing and accessories for a monthly subscription fee, it gains a physical connection to a physical store chain with a legendary brand.
“We’re excited to bring Le Tote together with Lord and Taylor, a storied brand that has stood for quality, style and service for nearly two centuries,” Rakesh Tondon, Le Tote’s CEO and founder, said in a statement. “With this acquisition, we continue our journey in creating the future of retail.”
Le Tote will be take over 38 Lord & Taylor stores, in addition to owning the brand. Lord & Taylor recently closed its flagship on Manhattan’s Fifth Avenue.