ShareThis Page

Lord & Taylor selling flagship Fifth Avenue store to WeWork

| Tuesday, Oct. 24, 2017, 5:39 p.m.
A man walks past the Lord & Taylor flagship store, Tuesday, Oct. 24, 2017, in New York. The store, known for its holiday displays along Fifth Avenue, is being sold to the office space sharing company WeWork.
A man walks past the Lord & Taylor flagship store, Tuesday, Oct. 24, 2017, in New York. The store, known for its holiday displays along Fifth Avenue, is being sold to the office space sharing company WeWork.

NEW YORK — Lord & Taylor's flagship store in Manhattan, known for its holiday displays along Fifth Avenue, is being sold to the office space sharing company WeWork.

The nearly 100-year-old building will be converted to WeWork headquarters, with less than a quarter of the space remaining for a Lord & Taylor store. Right now, 10 of the building's 11 floors are devoted to retail.

WeWork attracts millennials who are looking to share office space, a consumer segment that Lord & Taylor owner Hudson's Bay and other department stores want to attract. So store executives expect the stores to benefit from WeWork members going in and out of the building, and hopes they'll be shopping.

"This is a sign of the future," said Faith Hope Consolo, chairman of the retail group at Douglass Elliman Real Estate. She predicted that other department stores will likely lease some of their space to corporate groups that cater to millennials. "They're building their own traffic generators."

Lord & Taylor will keep the whole building with its usual operations through next year's holiday season. And the holiday displays will go on this year and next year, the company said. It didn't say what happens beyond that. Lord & Taylor was the first to create Christmas windows for sheer entertainment, rather than for selling merchandise. It also pioneered the animated window display back in 1938.

While shoppers may have been drawn to Lord & Taylor's windows, Consolo said she wasn't sure how much they were shopping. Many would buy cosmetics on the first floor but didn't often venture to the upper floors, she said. Hudson's Bay Co., which owns Lord & Taylor, Saks Fifth Avenue and Canada's Hudson's Bay, said in June it was cutting 2,000 jobs in North America as it shaves costs and tries to adjust to changes in how people shop.

The $850 million sale announced Tuesday is part of a plan by Hudson's Bay to pare down debt and reinvigorate sales. Company officials declined to say what the redesigned Lord & Taylor store of about 150,000 square feet will look like.

Richard Baker, chairman of Hudson's Bay, told The Associated Press that WeWork will also lease space in the upper floors in three of the company main stores — Hudson's Bay stores in Toronto and Vancouver as well as its Galeria Kaufhof in Frankfurt, Germany.

Department stores have been struggling to follow their customers online, with many closing stores and selling lucrative real estate. Big chains like Macy's had been under pressure from shareholders to get more value out of their real estate holdings. But Consolo agreed with Baker that the Hudson's Bay deal with WeWork is a dramatic change in how retailers are trying to capitalize on their real estate.

"We definitely think there is a future for department stores for people who reinvest in the business," Baker said.

On Friday, Hudson's Bay had said that CEO Jerry Storch would step down at the end of the month.

TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.