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Where the retail industry saw an uphill battle in Lord & Taylor’s middle-market woes, seven-year-old rental service Le Tote saw an opportunity.
Inventory and IP were the two major motivators behind Le Tote’s purchase of Lord & Taylor from Hudson’s Bay for $100 million earlier this week.
- Le Tote is one-tenth the size of Lord & Taylor by revenue, and it's much smaller than rival subscription services like Rent the Runway.
- With Lord & Taylor’s existing inventory, Le Tote will have access to hundreds of brands it didn’t previously offer for rent. And to stay competitive in the growing online clothing rental market (slated to reach $2 billion by 2023), wide selection is key.
Le Tote’s founders envision Lord & Taylor’s 38 existing stores as rental pick up and return hubs. But Hudson’s Bay will still own the real estate for the majority of those stores. It's covering Le Tote's rent until 2021.
Zoom out: Other department stores are exploring rental as a lifeboat in trying times. Nordstrom partnered with Rent the Runway to offer drop-off boxes at select locations, and Bloomingdale’s recently launched a rental service.