Hudson's Bay Co. could soon reach a deal to sell its Lord & Taylor department store chain to San Francisco-based apparel rental platform Le Tote Inc., Women's Wear Daily reported Aug. 8, citing sources with knowledge of the matter.
Le Tote is a subscription-based clothing rental service that sends members a personalized box of clothing and fashion accessories they can use as much as they like, and then send back for new options.
In May, the Canadian department store operator said it is exploring strategic options for the struggling unit, including a possible sale or merger. REIT activist Land & Buildings Investment Management LLC in 2018 urged Hudson's Bay to sell Saks Fifth Avenue and Lord & Taylor stores in an attempt to boost long-term shareholder value.
The report said Le Tote will pay cash and provide some equity to Hudson's Bay in exchange for free rent at Lord & Taylor stores for "a period of time." Le Tote will also take over Lord & Taylor's store teams even though it has never operated stores before, WWD said.
Most of Lord & Taylor's staff will be retained, the report added.
Hudson's Bay and Le Tote did not immediately respond to S&P Global Market Intelligence's request for comment.