Le Tote's $100M rescue of Lord & Taylor ended with both in Chapter 11

In August 2019 the retail world watched a seven-year-old clothing rental startup, Le Tote, pay $100 million for Lord & Taylor, the struggling 193-year-old department store then owned by Hudson's Bay. Le Tote's leadership was optimistic: cofounder and president Brett Northart argued digitally native brands eventually tap out their early adopters and need customers at scale, and said Le Tote would take its 'prowess, expertise and technology' and pair them with Lord & Taylor's iconic brand and loyal customer base — its data platform framed as the secret weapon.

The plan was to invest in Lord & Taylor's online business, experiment with store layouts, open new locations, and fold Le Tote's rental business into existing stores. Lord & Taylor, which had already sold its New York flagship to WeWork in 2017 and shuttered about a dozen other locations, was fighting off-price retailers and online luxury sellers.

About a year later, both companies filed for Chapter 11. Lord & Taylor began liquidation sales at 19 stores across 10 states while seeking a buyer for its most profitable locations — with the possibility of closing all of them. Le Tote disclosed about $138 million in debt and faced an early-October deadline to submit a bid for court approval; Lord & Taylor had until mid-October to find a buyer.

Both blamed the 'unprecedented strain' of COVID-19, but analysts pointed at the deal itself: GlobalData's Neil Saunders called the economics of running a department store 'so punishing' and said the acquisition 'really made no sense'.

About $138M in debt at Le Tote, liquidation sales at 19 stores in 10 states, and Lord & Taylor facing closure of every location.

The acquisition is a documented case of a startup buying a legacy brand for its audience and paying for the format's economics along with it.

The failure came fast enough to read as a controlled experiment: deal signed August 2019, both companies in Chapter 11 by August 2020.

The numbers are concrete and on the record — $100M purchase price, $138M debt, 19 stores already in liquidation.

An independent analyst verdict exists: the deal 'made no sense', and a smaller-format or organic physical expansion would have been the sane alternatives.

A data platform is not a turnaround plan for a structurally dying format: buying the brand without fixing the economics of the machine beneath it just puts two companies in court instead of one.

As of the August 2020 filings, both Le Tote and Lord & Taylor said they would keep operating through Chapter 11 while marketing the businesses; Lord & Taylor ran liquidation sales at 19 stores in 10 states, and the bankruptcy court set October deadlines for bids and a buyer.