Lord & Taylor, the historic American retailer, has filed for Chapter 11 bankruptcy due to the ongoing COVID-19 pandemic. The filing, submitted to the US Bankruptcy Court for the Eastern District of Virginia, reveals that the company’s assets and liabilities are estimated to range from $100 million to $500 million.

Established in 1826, Lord & Taylor is widely regarded as the oldest department store in the United States. Before seeking bankruptcy protection, the company had been exploring alternative options to navigate the challenging retail landscape caused by the pandemic. Unfortunately, numerous well-known brands, including J Crew Group, JC Penney, Neiman Marcus, and Lucky Brand, have also filed for Chapter 11 earlier this year, highlighting the devastating impact of the pandemic on the retail sector.

Last year, a fashion rental service start-up called Le Tote acquired Lord & Taylor from Saks Fifth Avenue’s owner, Hudson’s Bay Company, for C$100 million ($74.62 million). As part of the deal, Hudson’s Bay retained ownership of some of Lord & Taylor’s real estate and took responsibility for rent payments, which amounted to tens of millions of dollars annually.

In May, reports surfaced indicating that Lord & Taylor planned to liquidate inventory in its 38 department stores once pandemic-related restrictions were lifted, as the company had little hope of emerging successfully from the bankruptcy process. The retailer has a storied history as one of the oldest department store operators globally, originally founded by two English immigrants on the Lower East Side of New York City. Notably, during the US Civil War in the 1860s, Lord & Taylor opened a special section offering mourning apparel for widows.

Lord & Taylor’s flagship store on Manhattan’s Fifth Avenue first opened its doors in 1914. Over the years, the retailer became renowned for its upscale fashion offerings and elaborate holiday window displays.

The bankruptcy filing of Lord & Taylor serves as a stark reminder of the immense challenges facing the retail industry amidst the global pandemic. The economic impact of the crisis has compelled renowned retailers to reassess their strategies and make difficult decisions to ensure their survival. As the industry undergoes a significant transformation, the ability of businesses to adapt and thrive in the post-pandemic era remains uncertain.

Useful links:
1. Chapter 11 Bankruptcy Basics by US Courts
2. Retail Bankruptcies in 2020: More to Come by CNBC