In what’s become a common occurrence following the COVID-19 pandemic, another department store has filed for bankruptcy. Lord & Taylor, one of the oldest department stores in the United States, filed under Chapter 11 on Sunday, August 2, along with its owner Le Tote.
Because COVID-19 shut down retail stores for many months and has also prevented shoppers from not only going to stores, but spending their hard-earned money, it’s no surprise another business has taken such a huge hit.
Le Tote, which is an online apparel retail company, revealed in court documents that they earned close to $253.5 million in revenue last year. The company acquired Lord & Taylor last year for $75 million, which means they also own 38 physical stores.
The company also has 651 employees and revealed in court documents that they have debt obligations of close to $138 million.
Lord & Taylor, which was founded in 1826, has always been a popular store for middle class women and has been a staple in cities across the country for decades.
Prior to Le Tote purchasing Lord & Taylor, the retail chain was owned by Hudson’s Bay Co, which is still its largest shareholder with 27.6% interest.
Le Tote, on the other hand, was founded in 2012 and offers clothing rental starting at just $59 per month. It seems as if Le Tote was interested in getting into the brick and mortar game with its purchase of Lord & Taylor last year.
Because COVID-19 forced businesses across the world to shut down and people to shelter in place, countless companies were forced to lay off employees or shut down completely.
Lord & Taylor closed down their stores in March, and though the stores have reopened, it hasn’t been enough to save the company from bankruptcy. In fact, Le Tote laid off many employees due to the lack of financial revenue coming into the company.
While there’s no doubt Le Tote probably had big plans for Lord & Taylor, nothing could have prepared the company for the effects of a global pandemic. Consumers are less interested in purchasing clothing and many don’t have extra money to spend on fun activities such as shopping.
It’s a different world that we’re living in these days, and people all over the world are having to adjust, including businesses. Our world won’t be the same for quite some time, so it’s almost certain more companies will go through hard times just like Lord & Taylor in the future.