Lord & Taylor was be­yond sav­ing even be­fore Covid-19

The Star Malaysia - StarBiz - - Insight - By SARAH HALZACK

YET an­other sto­ried cloth­ing re­tailer has found it­self no match for the fi­nan­cial pain brought on by the pan­demic. Lord & Taylor, the depart­ment store chain that was once a star among the glit­ter­ing em­po­ri­ums of Fifth Av­enue, has filed for Chap­ter 11 bank­ruptcy.

Lord & Taylor filed along with Le Tote, the startup cloth­ing rental com­pany that had ac­quired the depart­ment store for Us$100mil last year in one of the weirder plot twists of the in­dus­try’s move to­ward e-com­merce.

The com­pany says in its fil­ing that its store foot­print is “un­sus­tain­able” and that it has hired con­sult­ing firms to as­sist with store clo­sures even as it con­tin­ues to seek bid­ders.

Given its long and rich his­tory, I un­der­stand the de­sire to find a life­line for Lord & Taylor.

But, by now, a sal­vage ef­fort is all but point­less and seems likely to be a mere pre­cur­sor to liq­ui­da­tion.

I’d sug­gest would-be bid­ders stay away, as it is use­less now to try to re­store re­tail’s past in­stead of ac­knowl­edg­ing that the pan­demic has re­con­fig­ured the in­dus­try in such a way that some chains are just be­yond sav­ing.

Lord & Taylor has fewer than 40 lo­ca­tions, a tiny fleet you might mis­take for an ad­van­tage in the on­line shop­ping era.

Af­ter all, Macy’s Inc and J C Pen­ney Co are clos­ing stores right now in or­der to sur­vive.

But Lord & Taylor’s store port­fo­lio is ac­tu­ally too small – and, cru­cially, too re­gion­ally con­cen­trated – for the cur­rent mo­ment. Most ob­vi­ously, it means it doesn’t have many hubs for curb­side pickup or to ship on­line or­ders from stores, for­mats which have sud­denly gained pri­macy amid the Covid-19 out­break.

Also, it turns out that brick-and-mor­tar stores serve as pow­er­ful mar­ket­ing tools and con­ve­nient re­turn cen­tres for on­line shop­ping.

In fact, Macy’s has said when it closes stores in a given mar­ket, digital sales of­ten sink, too.

So if a net­work of strate­gi­cally lo­cated stores plays a role in sup­port­ing a ro­bust e-com­merce busi­ness, Lord & Taylor is in a de­cid­edly dis­ad­van­taged po­si­tion.

In 2019, when He­lena Foulkes was still CEO of Hud­son’s Bay Co and Lord & Taylor was still owned by that depart­ment store gi­ant, Foulkes of­fered some clues about why the com­pany sought to un­load that par­tic­u­lar chain.

In an in­ter­view with Re­code, she noted that Lord & Taylor was “hand­i­capped by its po­si­tion­ing in the mar­ket­place” be­cause it wasn’t a dis­counter like Ross Stores Inc or TJX Cos.’ T.J. Maxx, nor was it an up­scale player like Hud­son’s Bay­owned Saks Fifth Av­enue.

That Lord & Taylor is not a lux­ury store may come as news to those who were only fa­mil­iar with its now-closed Ital­ian Re­nais­sance-style Man­hat­tan flag­ship or those who haven’t set foot in its mall stores in a cou­ple of decades.

But th­ese days, Lord & Taylor is ba­si­cally a com­peti­tor to Macy’s. Case in point: On its web­site as of Mon­day morn­ing, more than 70% of its dress se­lec­tion was priced be­tween US$50 and US$150, de­cid­edly more af­ford­able than as­pi­ra­tional.

It had also struck a part­ner­ship with Wal­mart Inc. back in 2018 – not ex­actly a paragon of lux­ury.

Macy’s, at least, has its Back­stage off­price con­cept, and Nord­strom has its Rack stores to go af­ter more price-con­scious con­sumers.

Lord & Taylor is sim­ply stuck in the mid­dle and doesn’t have an ob­vi­ous path to­ward be­com­ing ei­ther glitzier or a dis­counter.

That stuck-in-the-mid­dle dy­namic was among the many prob­lems that dragged an­other re­tail em­pire, Tailored Brands Inc, into bank­ruptcy this week.

I take no plea­sure in say­ing that there is no place for Lord & Taylor in today’s re­tail world.

It has an ex­tra­or­di­nary his­tory, from its found­ing as a dry goods em­po­rium in the 1820s to its meta­mor­pho­sis into one of the world’s old­est depart­ment stores.

It was a pi­o­neer of the idea of per­sonal shop­ping.

It flour­ished un­der the lead­er­ship of Dorothy Shaver, whose ap­point­ment as the com­pany’s pres­i­dent in 1945 made her a rare woman ex­ec­u­tive in an in­dus­try that still could stand to have more gen­der di­ver­sity in its top ranks.

Lord & Taylor has sen­ti­men­tal value for me, too.

It was a fre­quent stop on my child­hood trips to the mall, be­cause my mom had learned a love of it from her mother, who fre­quented a sub­ur­ban New York lo­ca­tion when it was in its full 1950s and 1960s glam­our.

My grand­fa­ther bought my grand­mother gifts there, usu­ally with one of his daugh­ters in tow to help make the se­lec­tion.

But try­ing to save Lord & Taylor, at this point, is a fool’s er­rand.

It was ill-equipped to sur­vive be­fore the pan­demic changed ev­ery­thing, and now it is es­sen­tially doomed. — Bloomberg

Views ex­pressed here are the writer’s own.

“Given its long and rich his­tory, I un­der­stand the de­sire to find a life­line for Lord & Taylor. But, by now, a sal­vage ef­fort is all but point­less.”

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