Le Tote, a startup with 200 employees will take over 38 stores totaling about 4.5 million square feet when it closes the purchase from Hudson’s Bay Co.

Bloomberg—Le Tote, the apparel rental retailer that on Wednesday announced plans to buy Lord & Taylor‘s operations, promises the department store’s customers more brands, new options to consume and “massive changes” to the website.

The retailer has significant work to do to bring LordandTaylor.com up to par, starting with its omnichannel services, says Lauren Freedman, Internet Retailer’s senior consumer insights analyst.

“Buy online pick up in store [BOPIS] is available but there are many limitations, likely related to Lord & Taylor’s recent store closures,” she says, noting that shoppers can’t place a BOPIS order on the retailer’s mobile site. “That’s a big miss.”

The retailer’s shipping offers are uncompetitive with its peers, she adds. For example, Lord & Taylor offers free shipping on orders of at least $99 ($49 for beauty products). By contrast, Macy’s offers offers free shipping at $75 and Nordstrom offers free shipping on all orders.

Le Tote CEO Rakesh Tondon says he wants to integrate the two businesses. That means Lord & Taylor visitors will ultimately have a choice to buy, rent, or join the ranks of subscribers. They’ll also get more curated suggestions from the tech-savvy company when shopping online.

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Le Tote regulars will gain access to 500 additional brands, as well as categories they currently can’t find on the site, such as cosmetics and shoes. They will be able to pick up their boxes in stores, return some items and make changes to the selection on the spot, Tondon says.

“We want to give customers the ability to consume the way they want to,” he said in an interview Wednesday.

While it’s become increasingly common for businesses that started online to venture into bricks-and-mortar stores, Le Tote’s entry is dramatic. The San Francisco-based startup with 200 employees will take over 38 stores totaling about 4.5 million square feet when it closes the purchase from Hudson’s Bay Co.

“We’re swinging for the fences,” Tondon said. “We believe we’ve got to aim big and go where the customers are.”

Hudson’s Bay Co., No. 41 in the Internet Retailer 2019 Top 1000, is selling the operations of its Lord & Taylor department store chain to clothing rental subscription company Le Tote for $100 million, the companies announced on Wednesday.

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Under the deal, Le Tote (No. 946) will operate 38 Lord & Taylor stores, according to the statement. Another five are set to shut down, according to the person. Previous closures of the chain have included the flagship Manhattan location. The San Francisco-based company said it will extend employment offers to “the vast majority” of Lord & Taylor employees.

Le Tote is backed by firms that include Lerer Hippeau, Azure Capital and Simon Ventures. The company offers monthly boxes of apparel items that users can purchase or return after use. The company is in the process of securing financing for the full purchase price, according to the statement.

 

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