Lord & Taylor, the oldest department store in the U.S., has filed for Chapter 11 bankruptcy on Sunday, according to a report by Bloomberg.
The department store has about $137.9 million of debt obligations, the report says.
Forbes also reports that Lord & Taylor’s store at Willowbrook Mall in Wayne is shuttering and has already begun liquidation sales, along with 19 other locations throughout the U.S.
There are currently nine Lord & Taylor locations left in New Jersey, but it is unknown if any others will be impacted.
The report also said Lord & Taylor’s parent company, Le Tote, has filed for bankruptcy. Hudson’s Bay Company sold the department store to Le Tote for $75 million in 2019. A Le Tote spokesperson did not respond to a request for comment.
Lord & Taylor has already shuttered its Woodbridge and Moorestown anchor stores, along with other department stores leaving the lineup, impacting the real estate of New Jersey malls. Planet Fitness has since replaced Lord & Taylor at Moorestown Mall, but remains temporarily closed due to the coronavirus pandemic.
The following New Jersey malls are anchored by Lord & Taylor stores:
- Bridgewater Commons: 400 Commons Way; Bridgewater
- Freehold Raceway Mall: 3710 Route 9; Freehold
- Livingston Mall: 112 Eisenhower Pkwy; Livingston
- Quaker Bridge Mall: 3320 Route 1; Lawrenceville
- Rockaway Townsquare: 301 Mount Hope Ave.; Rockaway
- Westfield Garden State Plaza: 1 Garden State Plaza; Paramus
- Willowbrook Mall: 1400 Willowbrook Mall; Wayne
Its Westfield store at 609 North Ave. W. is a stand-alone store, while its other Paramus store in The Fashion Center at Route 17 and Ridgewood Avenue is apart of a strip mall.
According to a report by The New York Times, analysts say about a quarter of malls in the U.S. could close in the next five years and that department stores account for about 30 percent of a mall’s square footage.
Although malls and retail, in general, is struggling, one commercial real estate expert thinks malls are here to stay.
“The mall is a great pastime and I think it will always be there,” David Chippendale, Senior Vice President of Weichert Commercial, told NJ Advance Media.
“It’s always a pretty hard hit when anchor stores leave malls and it kind of turns into a snowball effect,” Chippendale said.
When asked what landlords do to be proactive in the situation of bankruptcy, Chippendale said landlords tend to be generous with rent until another tenant can be brought in.
What happens if a mall can’t immediately replace an anchored tenant when it vacates?
“It all depends on the mall’s relationship with the bank and how deep their pockets are, Chippendale said. “Malls look to restructure a loan.”
Mall giants such as Simon and PREIT have been hit hard by vacancies due to the financial impact of the pandemic. Freehold Raceway Mall’s longstanding Nordstrom store will not reopen, while Sears will have just one New Jersey department store left in Jersey City after its Hackensack stand-alone location shutters.
JCPenney and Neiman Marcus have also filed for bankruptcy, although stores in New Jersey have not yet been affected.
Smaller mall tenants that have already shuttered stores or will are Sur La Table, New York & Company, Lucky Brand, GNC and The Children’s Place.
Lord & Taylor was founded in 1826, according to its website.