(Bloomberg)—Lord & Taylor, known for its upscale fashions and extravagant holiday window displays, sought bankruptcy protection from creditors after a turnaround effort faltered amid the coronavirus pandemic.
The oldest U.S. department store filed for Chapter 11 protection in Richmond, Virginia, on Sunday and will submit a reorganization plan with the court. The company, founded in Manhattan by two English immigrants in 1826, said it had about $137.9 million of debt obligations.
Lord & Taylor’s owner, fashion start-up Le Tote Inc., filed for Chapter 11 along with the retail chain. Le Tote (No. 835 in the 2020 Digital Commerce 360 Top 1000) bought the rights to the company’s stores, brand and ecommerce site from Fifth Avenue owner Hudson’s Bay Co. for $71 million last year.
The company, with 38 stores and 651 employees as of the filing, joins a burgeoning list of department-store casualties tied to the virus, which turned malls into ghost towns. Former fashion stalwarts like J. Crew Group Inc. and Neiman Marcus Inc. already filed for bankruptcy protection this year.
Lord & Taylor closed all of its stores temporarily in March as governors ordered residents to shelter in place to combat the spreading virus.
San Francisco-based Le Tote offers fashion-apparel rentals. Executives at the company have planned to cut the number of Lord & Taylor stores and target younger women with luxury try-on studios, beauty subscriptions and rental drop-off points.
Under the deal with Hudson’s Bay, the seller agreed to cover Lord & Taylor’s rent for three years, saving Le Tote $58 million annually. Le Tote said in a court filing Sunday that its companies reported revenue of about $253.5 million in 2019.
Men’s Wearhouse parent files bankruptcy
The filing in U.S. Bankruptcy Court in the Southern District of Texas makes the company the latest in a string of retailers that have grappled with competition from online shopping and have been among the hardest hit by COVID-19. Lockdowns have drained revenue, pushing already-struggling companies like J.C. Penney & Co., J. Crew Group Inc. and Neiman Marcus Group Inc. into bankruptcy.
Like those three, Tailored Brands was also in a tough spot before the outbreak. Sales have fallen every year since 2016 as Men’s Wearhouse and Jos. A. Bank contended with changing consumer tastes and e-commerce rivals. The retailer was preparing a filing that would give it a chance to cut its borrowings and close unprofitable locations, Bloomberg reported in late July.
The company traces its roots to 1973, when George Zimmer started Men’s Wearhouse in the Houston area. He would go on to become the face of the brand, starring in television commercials spouting his catchphrase “You’re going to like the way you look — I guarantee it,” before he was ousted in 2013. It acquired Jos. A. Bank the following year.