This Startup Bought Lord & Taylor. Can It Change the Way We Shop?
This year did not start well for brick-and-mortar chains.
In January, Pier 1 Imports announced it was closing up to 450 stores. Later that month, two other prominent retail brands — the high-end audio manufacturer Bose and the paper-goods chain Papyrus — reported their own significant closures. And yet, on the same day that Macy’s announced it was laying off 2,000 workers and closing 125 stores, I was arriving at the San Francisco offices of a startup called Le Tote…where a very different kind of thinking was going on.
Le Tote is not a brick-and-mortar business. It’s a fashion-rental company. Users subscribe by the month and can rent and return (or buy) entire wardrobes. But last November, seemingly out of nowhere, this eight-year-old startup purchased the 194-year-old department store chain Lord & Taylor for $100 million. The move raised many serious questions, most of which boiled down to: What?!? In 2018 alone, Lord & Taylor lost more than $100 million. Why in the world would a digital firm want anything to do with a floundering mall cornerstone?
That’s why, when I sit down with Le Tote’s founders, Rakesh Tondon and Brett Northart, there seems to be only one question worth asking: “Are you crazy?”
“You’ve got to be contrarian,” Northart says jokingly. Tondon smiles and says, “That’s where the outsize returns are!”
Related: How a Brick-and-Mortar Store Can Be the Foundation of Ecommerce Success
Tondon and Northart are very much aware of the seeming incongruity. To a certain extent, they are even banking on it. Just in terms of press coverage, the Lord & Taylor purchase generated scads of headlines. That’s useful marketing buzz for a startup seeking to bolster its brand in an extremely competitive marketplace.
But there’s
