The Hudson’s Bay Co. on Monday said it is exploring its options for its Lord & Taylor business, which could include a sale or merger.
The Canadian firm said the exploration is part of its “strategy to focus on its greatest opportunities.”
The disclosure isn’t surprising given that Hudson’s Bay last year inked a deal to sell the building that housed the Lord & Taylor flagship on Fifth Avenue in Manhattan to WeWork, now known as The We Company. That deal, which closed earlier this year, resulted in the shutdown of the Manhattan flagship in January. Hudson’s Bay, which had been simplifying its operational structure in 2018 through the sale of Gilt Groupe and a majority interest in the division that owns the Karstadt department store in Germany, pulled in $850 million from the sale.
Also last year, Hudson’s Bay partnered with Walmart Inc. to have a Lord & Taylor curated section on the discounter’s website. Lord & Taylor generated about $1 billion in annual volume in 2018, and current operations include a website and about 45 stores.
Helena Foulkes, Hudson’s Bay’s chief executive officer, said, “Over the last year, we’ve taken bold actions and made fundamental fixes that have resulted in a far stronger, more capable [Hudson’s Bay Co.], having returned to positive operating cash flow, increased profitability and strengthened the balance sheet.”
She emphasized that the review of strategic alternatives for Lord & Taylor is another example of how the company was exploring options to position Hudson’s Bay for long-term success. She said that throughout the review, “Lord & Taylor remains committed to serving customers across our stores and digital channels.”
There’s no guarantee that the review will result in the sale of the company or, if there are no takers, that Hudson’s Bay would even keep the business in operation. Foulkes said the company is “committed to working through [the review] as efficiently as possible.”
Hudson’s Bay has hired PJ Solomon as financial advisor for the review of strategic options.