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Old Posted Apr 3, 2017, 6:20 AM
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http://nypost.com/2017/04/02/lord-ta...lagship-store/

Lord & Taylor may build a skyscraper on top of its Fifth Avenue store




By Lisa Fickenscher
April 2, 2017


Quote:
Talk about dressing up a dowdy old department store.

Lord & Taylor is weighing a plan to build a luxury tower on top of its 103-year-old flagship on Fifth Avenue, The Post has learned — even as it shells out a fortune on remodeling and expanding a half-dozen stores elsewhere.

The high-flying project could result in a steel-and-glass skyscraper that houses offices and residential units, while still preserving the original, 11-story department store and its business, according to sources.

Further details couldn’t immediately be learned, but real estate insiders note that nearby skyscrapers stretch as high as 60 stories or more.

Richard Baker — the savvy New York property tycoon behind the talks — declined to comment.

Nevertheless, insiders said it’s clear that Baker — who scooped up Saks Inc. and its swanky Fifth Avenue flagship in 2013 after acquiring Lord & Taylor in 2006 — isn’t just making shrewd Manhattan bets: He’s doubling down on the troubled department store sector, too.

Last year, Lord & Taylor sunk about $25 million into renovating its Stamford, Conn., store. It’s now pouring $35 million into expanding its location in Manhasset, LI, adding more than 36,000 square feet to its current footprint of 160,000 square feet.

Another four stores also are in various stages of upgrade, with construction slated to be completed by fall.

“These updates are creating more fluid spaces, adding brightness to the floors and more excitement for our customers,” Lord & Taylor President Liz Rodbell told The Post during a recent tour of the flagship store.

The landmark location has just completed a $12 million revamp of its fifth floor, creating what the company claims is now the largest dress floor in the world.

Lord & Taylor accounts for just a fraction of the business of its Canada-based parent Hudson’s Bay, which Baker acquired in 2008. With Hudson’s Bay recently in talks to add Neiman Marcus or even Macy’s to his mall-based empire, sources say it’s likely to become a still-smaller slice of the pie.

Nevertheless, Lord & Taylor’s Scarsdale store is among the most high-volume department stores in the country, raking in nearly $100 million in sales, according to an a source with knowledge of the store’s performance.

“It’s a misconception that all department stores stink,” said the source.

Hudson’s Bay expects to spend up to $710 million on capital investments in 2017, according to guidance it offered earlier this year. That figure includes the multiyear, $250 million renovation of the Saks Fifth Avenue flagship.

The heavy spending comes despite rampant skepticism about Baker’s retail aspirations since he first plowed into the sector with his Lord & Taylor acquisition — including from Baker himself.

At the time, Baker had said the L&T flagship was “too large at that location,” and even muttered about the possibility of redeveloping the site. Subsequently, Hudson’s Bay closed 33 L&T stores, leaving the chain with 50 locations.

The new “Dress Address” floor on Fifth Avenue is now selling dresses costing as much as $14,000 — 10 times a top price of $1,400 before the renovation.

Sales of women’s dresses at Lord & Taylor have increased nearly 10 percent over the past couple of years, the company says.

“If you don’t reinvest in your business it deteriorates, which is what we saw happen to Sears,” said Richard Baum, managing partner of Consumer Growth Partners. “We know that the experience the customer has in a store is probably more important than it ever used to be.”

The 191-year-old Lord & Taylor brand is the least exclusive of HBC’s US brands, which positions it to compete more effectively against the off price retailers, the only segment of the women’s apparel market that has been posting impressive sales gains over the past year.

“It makes sense, given the trend towards off-price” retailers like Century 21 and TJ Maxx that specialize in discounted designer duds, says retail analyst Steven Salz of M Partners.
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