Hudson’s Bay Company has completed the sale of Lord + Taylor to Le Tote, a leading fashion rental subscription service, for $75 million in cash and a secured promissory note for $25 million payable in cash after two years, subject to customary adjustments.
HBC now holds an equity stake of approximately 25% in Le Tote, and a right to designate two members to Le Tote’s board of directors.
Le Tote has acquired the Lord + Taylor brand and related intellectual property, as well as assumed operations of 38 stores, Lord + Taylor digital channels and the associated inventory. In addition, Le Tote has hired the vast majority of Lord + Taylor’s associates, the company said.
HBC said it will maintain economic responsibility for the rent payments owed by Lord + Taylor at the 38 locations operated by Le Tote for the initial three years post-closing. Net of HBC’s distributions from HBS Global Properties, HBC expects to continue to be liable for approximately $77 million in Lord + Taylor total cash rent on an annual basis.
Starting in 2021, HBC and Le Tote will have options to reassess the Lord + Taylor store network, which may include HBC recapturing select locations to determine their highest and best use, including possible redevelopment into mixed-use properties.