Mon. Nov 18th, 2019

Hudson’s Bay selling Lord & Taylor to clothing subscription company for $100 million

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Hudson’s Bay Co.

HBC, +1.18%

said Wednesday that it is selling Lord & Taylor to Le Tote, a clothing rental subscription company, for $132.7 million. Hudson’s Bay will receive $75 million upon closing the transaction, and a secured promissory note for $25 million in cash payable after two years. The transaction is expected to close before the start of the holiday season. Hudson’s Bay will also get an equity stake in Le Tote and two seats on the company’s board, along with rights as a minority shareholder. Le Tote will acquire the Lord & Taylor brand, its intellectual property and inventory, a fleet of 38 stores that Le Tote will operate, and Lord & Taylor’s digital channels. The company is in the process of securing financing for the purchase. Le Tote plans to extend job offers to the “vast majority” of Lord & Taylor’s workers. Le Tote was founded in 2012, and offers customers the chance to rent clothing for a flat monthly fee, and purchase items they want at a discount. Membership starts at $69 per month. In fiscal 2018, Lord & Taylor generated $1.4 billion of Hudson’s Bay’s total $9.4 billion in sales. In 2021, the two companies will examine the store network for possible redevelopment. Hudson’s Bay received an offer from Catalyst Capital Group Inc. to acquire nearly 20 million shares earlier this month. Lord & Taylor already shuttered some locations and sold its iconic Fifth Avenue store to WeWork. Hudson’s Bay stock is up 1.6% in Wednesday trading, and up 41.4% for the year to date. The S&P 500 index

SPX, +0.41%

is up 14.5% for the period.

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