NEW YORK (CBSNewYork/AP) — Lord & Taylor’s flagship store on Fifth Avenue, known for its holiday displays, is being sold to the office space sharing company WeWork.
The nearly 100-year-old building will be converted to WeWork headquarters, with less than a quarter of the space remaining for a Lord & Taylor store. Ten of the building’s 11 floors are now devoted to retail.READ MORE: New Jersey Officials Monitoring Omicron Variant, But Say Delta Is Still A Concern As Travel Picks Up
WeWork attracts millennials who are looking to share office space, a consumer segment that Lord & Taylor owner Hudson’s Bay and other department stores want to attract. So store executives expect the stores to benefit from WeWork members going in and out of the building, and hopes they’ll be shopping.
Lord & Taylor will keep the whole building with its usual operations through next year’s holiday season. And the holiday displays will continue to go on this year and next year, a company spokeswoman said. The department store was the first to create Christmas windows for sheer entertainment, rather than for selling merchandise. It also pioneered the animated window display back in 1938.
Company officials declined to share details for what the redesigned Lord & Taylor store of about 150,000 square feet will look like.READ MORE: NYC 'Strongly Recommends' Masks In Public Indoor Spaces, As Omicron Variant Reaches North America
The $850 million sale, announced Tuesday, is part of a plan by Hudson’s Bay Co., which owns Lord & Taylor stores under its own brand as well as Saks Fifth Avenue, to pare down debt and reinvigorate sales.
Richard Baker, chairman of Hudson’s Bay, told The Associated Press that WeWork will also lease space in the upper floors in three of the company main stores — Hudson’s Bay stores in Toronto and Vancouver, Canada, as well as its Galeria Kaufhof in Frankfurt, Germany.
Department stores have been struggling to follow their customers online, with many closing stores and selling lucrative real estate. Big chains like Macy’s had been under pressure from shareholders to get more value out of their real estate holdings. But the Hudson’s Bay deal with WeWork is a change in how retailers are trying to capitalize on their real estate.
“We definitely think there is a future for department stores for people who reinvest in the business,” Baker said.
On Friday, Hudson’s Bay had said that CEO Jerry Storch would step down at the end of the month.MORE NEWS: Harlem's Josephine Baker About To Be Given France's Highest Honor, A Resting Place In The Pantheon
(© Copyright 2017 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)