Lord & Taylor sold for $100M to rental clothing company

Lord & Taylor, one of the nation's oldest department stores, is being sold for $100 million to a rental clothing company.

Le Tote Inc. is buying the company from Hudson's Bay Co., which gets a minority stake in Le Tote and will control two seats on its board.

Lord & Taylor, founded as a dry goods store in 1826, has struggled recently as more people shop online. It has closed several stores, including its flagship on New York's Fifth Avenue, which shut its doors for good earlier this year after more than a century in the 11-story building. There are currently 38 Lord & Taylor stores across the country. On Long Island there are stores in Garden City, Manhasset, Huntington Station and Bay Shore.   

Under the agreement Hudson's Bay and a subsidiary will own the stores, and Le Tote will operate from them.

Le Tote, created less than a decade ago in San Francisco, said Wednesday that it plans to bring clothing rental to Lord & Taylor's customers. With clothing rental, popularized by Rent the Runway and other startups, customers pay a monthly fee to get clothes shipped to them, wear a few times and then ship them back. Traditional retailers, such as Urban Outfitters and Banana Republic, are launching their own versions of this business model.

Le Tote will pay Hudson's Bay $75 million in cash when the deal closes, which is expected to happen before the holiday season. It will also pay Hudson's Bay $25 million in cash after two years.

Hudson's Bay, based in Canada, also owns Saks Fifth Avenue.