Less than a year after French clothing rental startup Le Tote bought department store Lord & Taylor, the two have filed for Chapter 11 bankruptcy.
As part of the bankruptcy deal, the company plans to liquidate 19 of its 38 store locations.
According to documents filed in the U.S. Bankruptcy Court in the Eastern District of Virginia, Le Tote generated nearly $253.5 million in revenue in 2019 and held a debt obligation of $137.9 million.
Since it acquired Lord and Taylor for $75 million in November last year, the company has had 651 employees and has held a portfolio of 651 employees, Retail Dive reported. The court filings reveal that the real estate arm of the company’s previous owner Hudson Bay Company still owns a majority 27.6 percent stake in the venture.
The 200 years old retailer’s plan to sell itself to Le Tote, a seven-year-old startup at the time, was seen as a hail mary to survive. The company also closed its flagship store on 5th Ave and sold its iconic building in Manhattan to WeWork, which the shared workspace company now calls its headquarter.
Before Lord and Taylor was acquired last year, the retailer was struggling to make its ends meet with declining foot traffic in mall locations. While the dealing with Le Tote could have helped the retailer bounce back on its feet, the pandemic proved to be the last nail in its coffin as consumers’ spend on discretionary products such as clothing and accessories significantly dropped.
