Lord & Taylor, the famed 193-year-old brand that’s struggled for years and recently closed its Fifth Avenue flagship in New York, is getting a second life.
Le Tote, a 7-year-old digitally native clothing subscription brand, acquired the storied retailer for about $100 million. Hudson’s Bay Company, which owned Lord & Taylor, is still set to keep all ownership of the company’s real estate, while Le Tote will take over operations of the brand’s 38 stores. In 2021, the two companies are set to take a look at how to revamp Lord & Taylor stores. This deal is expected to close before the 2019 holiday season begins.
“We saw the allure of taking a brand that means a lot of different things to a lot of people but has broad recognition and really revitalizing and giving it new focus,” Rakesh Tondon, founder and CEO of Le Tote, told Adweek in an interview. “[And] having those physical locations is an interesting way for us to connect with our customers.”
Le Tote is acquiring Lord & Taylor at at time when other legacy retailers such as Macy’s and JCPenney face headwinds in the market–and when President Trump continues his trade war with China and a recession looms over the economy. However, Tondon said Le Tote wants to turn around Lord & Taylor by making it focus on the consumer again and acknowledging that, as some stores close down, that spend has to shift somewhere else.
To do so, Tondon said LeTote has built all of its technology in-house to make the subscription business seamless, which it can now use across Lord & Taylor, and, most importantly, use its vast amount of data to figure out what brands, styles and other preferences are working for customers—and what’s not.
Tondon said 60%-80% of Le Tote’s items are reviewed, giving the company insight into why some items work and others don’t.
“I think it’s less about having a mobile-optimized website and more about offering services and transactions that are relevant to the customer when they’re looking to make that purchase or rental,” Tondon said. “It’s about understanding what the customer wants before they come to you with ‘Hey, I’m looking.'”
To date, Tondon said Le Tote’s seen profitability in some months but has yet to reach a full year of profitability. But, he expects the acquisition of Lord & Taylor to build a profitable business. Now that Le Tote is set to have a retail footprint, Tondon said Le Tote plans on adding to the in-store experience, which includes bringing the rental model to physical locations. He added that, in addition to revamping the in-store experience, Le Tote wants to bring more Lord & Taylor locations across the country and make it a more “nationally recognized brand.”
“What we want to do is really go out to these markets Lord & Taylor is operating and get to know those customers,” Tondon said. “For us, it’s about delivering value to the customer.”