Lord & Taylor Gets On with Its Life
By Rick Moss
As expected, Federated Department Stores announced yesterday that it will sell
its Lord & Taylor chain, which it had acquired along with the May Co. deal,
to the principals of real estate investors/developers NRDC Equity Partners and
Apollo Real Estate Advisors.
The cash price for the 48-store chain (41 along the Northeastern corridor and
seven in Illinois and Michigan) will be $1.2 billion, with closing expected
during the third quarter of 2006. L&T had sales of $1.57 billion in 2004,
according to Bloomberg.
In a statement to the press, NRDC indicated that they intend to keep the chain
intact and retain Jane Elfers in the position of CEO.
“Lord & Taylor has been an iconic national brand for 180 years,” said NRDC
President Richard Baker. “We believe there is significant opportunity to continue
the revitalization of the brand begun in 2003 by Jane Elfers and her management
Although, according to the New York Times, Baker has said they will
keep the flagship Fifth Avenue store, plans do not preclude the possibility
that some property will be sold off. NRDC, which also acquired Linens ‘n Things
in partnership with Apollo in February, said they are reviewing the real estate
portfolio but that “no decisions have been made on any individual stores.”
Moderator’s Comment: How do you rate the future prospects
of Lord & Taylor under its new owners? How will springing the chain lose
as an “independent” affect the department store landscape?
From the moment the Federated/May deal was announced,
most knew Lord & Taylor was earmarked for sale. It was clear that Federated
would have its hands full hanging the Macy’s banner on 400 May locations, and
L&T appeared to be a market segment redundancy to Bloomingdales, also in
the Federated stable.
There are malls (Willowbrook, here in North Jersey, for
instance), that have Macy’s, Bloomies and L&T as anchors. So the challenge
to Ms. Elfers is clear…how do you assure that your chain has a reason for
With the huge effort to create the national Macy’s brand,
Federated’s eye could be off of Bloomingdale’s long enough for L&T to make
some distinctive moves and upgrade its “reputation for dowdy fashions and older
shoppers” (NYTimes). On the up side, L&T could emulate Nordstrom
as opposed to Bloomingdale’s. Now that’s head-to-head competition worth aspiring
Rick Moss – Moderator
to Acquire Lord & Taylor – NRDC news release
to Sell Lord & Taylor to Apollo Group – Bloomberg
& Taylor to Remain on Fifth Ave. – New York Times