Hudson’s Bay Selling Lord & Taylor to Fashion Subscription Service – The Wall Street Journal

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Hudson’s Bay will get a stake in Le Tote and hold two seats on its board, Hudson’s Bay said. It will get C$99.5 million ($75 million) when the deal closes and a $33.2 million secured promissory note that after two years can be paid in cash, it said. Hudson’s Bay expects the deal to close before the holiday season begins.

Le Tote will operate Lord & Taylor’s 38 stores and expects to offer jobs to “the vast majority” of associates at Lord & Taylor, Hudson’s Bay said. But Hudson’s Bay is still going to be responsible for Lord & Taylor stores’ rent, and the company’s real-estate joint venture will still own Lord & Taylor properties, the company said.

Hudson’s Bay and Le Tote will be able to re-evaluate Lord & Taylor’s stores come 2021, Hudson’s Bay said. That could involve Hudson’s Bay “recapturing” store locations and redeveloping them, the company said.

In the previous fiscal year, Hudson’s Bay had C$9.4 billion in retail sales, of which C$1.4 billion were from Lord & Taylor.

In May, Hudson’s Bay said it was looking at strategic alternatives for the department store.

Founded in 2012, Le Tote rents women’s clothing and accessories for a flat monthly fee. Its backers include venture-capital firms Andreessen Horowitz, Google Ventures, Azure Capital Partners, Lerer Hippeau Ventures and Simon Venture Group.

Write to Allison Prang at [email protected]