Lord & Taylor sells flagship to WeWork

Lord & Taylor’s flagship store in Manhattan, known for its holiday displays along Fifth Avenue, is being sold to office space sharing company WeWork.

The nearly 100-year-old building will be converted to WeWork headquarters, with less than a quarter of the space remaining for a Lord & Taylor store. Ten of the building’s 11 floors are now devoted to retail.

WeWork attracts Millennials who are looking to share office space, consumers that Lord & Taylor owner Hudson’s Bay and other department stores want to attract. So executives hope that the WeWork members going in and out of the building will be shopping.

Lord & Taylor will keep the whole building with its usual operations through next year’s holiday season. And the holiday displays will continue this year and next, a spokeswoman said. The department store was the first to create Christmas windows for sheer entertainment, and pioneered the animated window display in 1938.

The redesigned Lord & Taylor store will be about 150,000 square feet.

The $850 million sale, announced Tuesday, is part of a plan by Hudson’s Bay to pare debt and reinvigorate sales.

WeWork will also lease space in the upper floors of Hudson’s Bay stores in Toronto and Vancouver, and in its Galeria Kaufhof in Frankfurt, Germany.

Struggling retailers have been looking for ways to sell store sites that can bring in much-needed funding, but the WeWork deal is a change in how retailers are trying to capitalize on their real estate.