Glossy – Once, Lord & Taylor’s Fifth Avenue flagship store was a jewel in the crown of Hudson’s Bay Company, its parent company. In 2010, HBC invested $150 million in updating the store. Seven years later, Lord & Taylor received another $12 million renovation. Yet within just over a year of that final investment, the company sold the building, the oldest department store in the country, to WeWork, closing its doors for good on Thursday.
So how did the company go from pouring more than $100 million into the store to selling it in just a few years? In short, it is likely because of the same challenge that legacy retailers across the board are facing: strong competition from disruptive new forces.
“With intense competition from online retailers, maintaining a profitable brick-and-mortar presence in the high-priced real-estate shopping district on Fifth Avenue is extremely challenging,” said David Naumann, vp of marketing at BRP, retail consulting firm. “While a presence on Fifth Avenue helps elevate the brand image for Lord & Taylor, brand image doesn’t translate into profitability. As a corporation driven by stockholders’ desire for stock price appreciation, Hudson’s Bay Company sold its Lord & Taylor property to boost its profitability.”
Read Full Article: How Hudson’s Bay Company looks to pay off its debt and revitalize its stores