Rental startup Le Tote just acquired Lord & Taylor for $100 million.
Lord & Taylor is a department store that was founded in 1826 and has been owned by Hudson’s Bay Company, which also owns Saks Fifth Avenue. Le Tote will take control of all of the department store’s operations, which include its digital channels and its 38 stores. Le Tote will extend employment offers to the “vast majority” of Lord & Taylor associates, according to a joint press release about the acquisition. Last fiscal year, Lord & Taylor generated $1.4 billion in sales.
The press release said that Hudson’s Bay will continue to retain ownership of the real estate related to Lord & Taylor, but in 2021, Le Tote and Hudson’s Bay will have the option to reassess this store network. At that point, Le Tote may decide to shrink its retail footprint.
It’s an interesting acquisition since it’s usually large heritage retailers that acquire startups. But in other ways, the acquisition makes a lot of sense. Many digitally native startups have been working to create a brick-and-mortar footprint. Brands like Away, Warby Parker, and Casper have created physical stores around the country. For Le Tote, a seven-year-old company, this acquisition opens up new possibilities when it comes to blending rental technology with traditional retail. For instance, Le Tote might be able to make Lord & Taylor merchandise rentable, or use the retail locations as drop-off points.
After years of the retail apocalypse—as thousands of stores have shuttered every year—it looks like the tide is turning. Retail is making a comeback, but this time it’s powered with the technology and web savvy of successful digitally native startups. It’s still unclear what the retail landscape will look like a decade from now, but what’s clear is that brick-and-mortar stores will still be part of our lives.