Venerable department store Lord & Taylor is exploring filing for bankruptcy protection following the shuttering of all its 38 U.S. department stores in the wake of the coronavirus outbreak and accompanying full-stop in economic activity.
Citing people familiar with the matter, Reuters reported that bankruptcy was one of several options the retailer is exploring amid the ongoing pandemic, which has been particularly hard on retailers amid stay-at-home orders across the country and the economic shutdown that has left millions unemployed and financially struggling.
Lord & Taylor executives are also in discussions with creditors on negotiating relief from creditors and sourcing additional financing. While businesses grappling with the economic fallout from the pandemic have tapped government funds as part of a $2.3 trillion stimulus program, most retailers have not been eligible for aid.
Fashion rental service start-up Le Tote acquired Lord & Taylor last year from Saks Fifth Avenue owner Toronto-based Hudson’s Bay for $100 million. Le Tote acquired the Lord & Taylor brand and related intellectual property while assuming operations of its stores, digital channels and associated inventory.
The news follows other retailers who are also weighing bankruptcy protection as the coronavirus pandemic not only continues to keep the broader U.S. economy closed, but as the knock-on economic effects make clear that consumers may not rush back to retail buying when the pandemic subsides.
Neiman Marcus plans to file for bankruptcy as soon as this week, while J.C. Penney (JCP) - Get Report also is considering a similar move. Retail sales for March fell 8.7%, one of the sharpest monthly declines in history.