Many US businesses grappling with the economic fallout from the pandemic have tapped government funds as part of a $2.3 trillion stimulus program. But most retailers have not been eligible for aid. Lord &Taylor plans to file for bankruptcy protection after it was forced to temporarily shut all of its 38 U.S. department stores in the wake of the coronavirus outbreak, people familiar with the matter said on Monday.
Fashion rental service start-up Le Tote acquired Lord & Taylor last year from Saks Fifth Avenue owner Hudson's Bay Company for $100 million. Hudson's Bay kept ownership of some of Lord &Taylor's real estate and assumed responsibility for its rent payments, amounting to tens of millions of dollars a year.
Le Tote also owes Hudson's Bay C$33.2 million stemming from a promissory note from the deal. Le Tote acquired Lord & Taylor to expand beyond e-commerce into brick-and-mortar stores. It acquired Lord & Taylor's operations, including its merchandise inventory, online business and most of its employees. Similarly, Neiman Marcus Group plans to file for bankruptcy as soon as this week, while J.C. Penney Company Inc is also considering a similar move.
