HBC completes sale of Lord & Taylor building
Lord & Taylor’s flagship store on Fifth Avenue closed for good on January 2, 2019, and now it has officially been sold to WeWork Property Investors (WPI) for a total transaction value of CAD $1.1 billion ($850 million).
Though the space was sold to WeWork in 2017, a space-leasing company, the 11-storey building only closed at the beginning of 2019, after 104 years in business. One last major blowout sale was held by the historic department store owner over the Holiday season leaving the Fifth Avenue store virtually empty.
“This transaction reinforces HBC’s ability to identify undervalued real estate investments with great potential,” said Richard Baker, HBC’s Governor and Executive Chairman, in a news statement.
“We continue to strengthen our retail business and unlock the value of our real estate assets.”
As a result, HBC has eliminated the approximately CAD $400 million Lord & Taylor mortgage and has reduced borrowings under its asset-based revolving facility. In fact, since the end of fiscal 2017, the company has paid down approximately CAD $1 billion in debt “providing us flexibility to support our business goals and advance our strategy,” added Baker.
The department store-owner announced back in June that it would sell up to ten Lord & Taylor stores, including the flagship Manhattan location, as its quarterly loss widened. Lord & Taylor remains one of HBC’s poorest performing players, as the department store segment continues to struggle.
The department store chain has been hit from the reality of online sales, leaving a number of its brick-and-mortar locations with little options. Last year, HBC equally sold its unprofitable online brand Gil.
Still, the group continues to operate 350 stores and more than 45,000 employees around the world through its numerous banners including Saks Fifth Avenue, Hudson's Bay, Lord & Taylor, and Saks OFF 5TH.
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