Lord & Taylor news for Wednesday includes the retailer being sold by Hudson’s Bay (OTCMKTS:HBAYF).
This Lord & Taylor news will have apparel rental company Le Tote picking up the retailer for $75 million in cash. The finances need to fund this transaction are still in the process of being acquired. Hudson’s Bay can terminate the agreement if Le Tote doesn’t get the financing within 45 days.
The deal also has some other benefits for Hudson’s Bay besides the cash payment. Among these is secured promissory note for $33.2 million in cash payable in two years. It will also gain an equity stake in Le Tote and two seats on the company’s Board of Directors. Plus it gets additional rights as a minority shareholder.
This deal has Le Tote gaining gaining all intellectual property in connection with Lord & Taylor. It also covers the chain’s 38 stores, digital channels and all of the retail brand’s inventory. What it doesn’t cover is the owned and ground-leased real estate assets connected to the retail brand. Hudson’s Bay and HBS Global Properties will be retaining ownership of this.
The Lord & Taylor news release also notes that Le Tote won’t be responsible for paying rent at first, either. Instead, Hudson’s Bay will cover this for at least the first three years. This will have it covering $77 million in cash for rent of Lord & Taylor locations each year.
Lord & Taylor employees with concerns about the deal likely won’t have anything to worry about. Le Tote says that it is planning to “extend employment offers to the vast majority” of the retail chain’s associates.
HBAYF stock was up 1% as of noon Wednesday.
As of this writing, William White did not hold a position in any of the aforementioned securities.