Lord & Taylor parent NRDC Equity Partners plans to spend $500 million renovating the department store chain, including $100 million earmarked for the flagship store at Fifth Avenue and 39th Street, The Post has learned.
Any overhaul of the flagship is complicated by the building’s proposed designation as a landmark. The Landmarks Preservation Commission is expected to vote on the building’s status this fall, according to spokeswoman Lisi de Bourbon. As a result, the planned renovation currently involves only the building’s interior.
The move is nevertheless significant, marking the first time in 40 years that aisles, elevators and dressing rooms of the Lord & Taylor flagship will have undergone a significant refurbishment.
Interior designers Skidmore Owings and Merrill, Randy Ridless and Mancini & Duffy are working with Lord & Taylor on the project.
Plans call for the retail space to be cut nearly in half from the 11 floors it currently occupies, with more space given over to young, emerging designers, sources said.
The upper floors would likely become offices.
The flagship generates about $140 million in annual sales of Lord & Taylor’s overall $1.4 billion in annual revenue – a smaller percentage than the flagships of other chains. By contrast, the Saks Fifth Avenue flagship accounts for about one-fifth of its overall sales.
Lord & Taylor Chief Executive Jane Elfers has over the past five years recalibrated the merchandise to include more upscale and stylish looks.
Lord & Taylor has struck deals with Bryan Bradley of Tuleh and Cynthia Steffe to design exclusive lines for its stores.
Separately, NRDC Equity Partners is close to finalizing a deal to invest in the Peter Som label, potentially giving Lord & Taylor access to any lower-priced lines the designer creates, sources said.
Many industry observers had considered Lord & Taylor, which has 47 stores around the country, to have a dim future when Federated Department Stores (now called Macy’s) put the division up for sale after its 2005 purchase of the May Department Stores Co..
NRDC Equity Partners stepped in with a $1.2 billion offer for Lord & Taylor, driven primarily by the value of its real estate. The New York flagship alone is thought to be worth $400 million.
But as NRDC Equity Partners Chief Executive Richard Baker was closing the deal, Elfers persuaded him to take a deeper look at the potential for Lord & Taylor, which is now showing increased profitability, sources said.
Ultimately, Baker would like to give the façade of the Lord & Taylor flagship a facelift, sources said. Vendors have been shown blueprints for a glass and steel structure, though those plans are on hold pending the decision by the Landmarks Commission, these people said.