Yesterday, the big department store news late in the day was that Saks had to let go 1,100 members of its company, which is about 9% of its workforce, and announced that they may be closing some locations in the next year.
This was on top of Neiman Marcus having let go 375 people earlier this week.
But, Lord & Taylor, who just let go 100 employees, also just received $60 million from NRDC Equity Partners, L&T’s parent company, so they can continue to operate at cost (for as long as that lasts).
That might sound like a “bail-out,” but it also shows that NRDC, a New York-based private equity firm that basically thrives on acquiring operating companies, has confidence that Lord & Taylor will survive the recession, especially since its holiday sales weren’t nearly as dismal as most of its competitors (their December sales dipped 5%, as opposed to the average of about 25% as experienced by Saks and Neiman Marcus).
So, good news if you’re a fan of Lord & Taylor, not so good news if you’re on team Saks.
Tags: Department Store, Lord & Taylor, Saks, WWD
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i really don’t think saks is going to make it through without closing any stores. too bad.
The Saks website is currently experiencing “technical difficulties.” I know that glitches happen occasionally to all websites, but it’s just such a coincidence for it to happen the day they slash their inventory and make tremendous job cuts!
(http://www.saksfifthavenue.com/)
the reality is that saks and neiman had a stellar year last year. of course you’re going to see enormous same store drops when this year went terribly. L&T on the other hand didn’t have a good year last year either, so comparing one bad year to another, you only wind up with a deceptive 5% same store drop.
NRDC made too big of a bet (in my opinion a terribly ill-conceived one) with buying L&T, fortunoffs and hudson’s bay, to let it fall apart at this point so they’re going to keep on pumping cash into it until eventually it gets to the point where they themselves can no longer sustain business. look at what happened to NRDC’s first foray into retail… linen n things.