Hudson’s Bay Company Announces Closure of Lord & Taylor’s New York Flagship and Sale of Gilt Groupe to Rival Rue La La

Executive Summary

• Canadian retail group Hudson’s Bay Company (HBC) announced that it will close up to 10 of its Lord & Taylor US department store locations, including its iconic flagship store on Fifth Avenue in Manhattan. The Lord & Taylor flagship has been open for 104 years and is expected to close by the end of the year.
• HBC said that its plans to downsize Lord & Taylor’s store network are a first step toward driving increased profitability and that the company is taking advantage of a smaller store footprint to rethink the model and focus on Lord & Taylor’s digital sales.
• About two years after acquiring the flash-sales website, HBC agreed to sell Gilt Groupe to Rue La La, a leader in the digital private-sale space. Rue La La seeks to create one large flash-sales entity called Rue Gilt Groupe. Financial terms of the deal were not disclosed. The two brands plan to operate independently of each other.
• Rue La La will continue selling both high- and low-end products, while Gilt will focus more on higher-end products.The combined group is expected to be the fourth-largest player in the flash-sales space, with 20 million members and reach $1 billion in sales, according to Rue La La CEO Mark McWeeny.