Dear Lord & Taylor, Retail's Resting Place

At 10 a.m. each morning at Lord & Taylor, everyone stands at attention—even the woman at the Chanel counter who has been polishing a Kate Moss poster on the marble—and the loudspeaker plays “The Star-Spangled Banner”: “Oh, say can you seeee …. ” Some employees hold their hands over their hearts. Then there is the sound of coins, as the salespeople begin counting their registers, looking up to say “Goooood morning” with that happy ring—a retail ritual that dates back a century and a half of tissue paper and perfume.

It’s a far cry from the boom-boom and ankle boots under the tents at Bryant Park just two blocks north. Lord & Taylor, one of the country’s oldest department stores and formely one of the finest, is today a curious mix of Otis escalators and Anna Sui clothes, a stalwart bastion of the civilized, trusty department store—neither entirely the past or the future, but some dreamy place in between.

In June, Federated Department Stores, owner of the 48-store string of Lord & Taylors since Federated’s merger with the May Department Stores Company in 2005, announced the chain’s sale for $1.2 billion in cash to a real-estate-oriented partnership, NRDC Equity Partners, consisting of National Realty and Development Corp. (NRDC) and Apollo Real Estate Advisors. Apollo is a principal backer of the multi-complex Time Warner Center in Columbus Circle, and so one couldn’t help but speculate: Would the 600,000-square-foot Fifth Avenue flagship become a carnival of entertainment topped by a tower of condos?

“Yes, we could build on top. But we have made no decision what to do with the existing building,” said NRDC principal Richard A. Baker, who led the investor team and will become chairman of the brand when the deal is closed in a few weeks, on the phone from his headquarters in Purchase, N.Y. “We hope to run a successful store out of that location for a long time to come.”

In 2000, Jane Elfers, who joined Lord & Taylor as a buyer in 1989 and has moved steadily up the ranks there, was made the chief executive and president at age 39—the second woman in the store’s history, after the legendary Dorothy Shaver, to hold the position. “We are pleased with Jane Elfers’ revitalization of the brand,” Mr. Baker said, adding that he has been a Lord & Taylor loyalist since his childhood in Greenwich, Conn. “My family, everyone shopped there—my mother, my aunts, my sister,” he said. “I’m getting a lot of e-mails: ‘Don’t mess with Lord & Taylor!’”

Ms. Elfers was on vacation and couldn’t be reached for an interview.

As for the other 47 stores in the Northwest and Illinois and Michigan, Mr. Baker said the team is “doing a lot of thoughtful analysis” and reviewing the individual stores’ portfolios. “Lord & Taylor will continue with its name and identity,” he said. “Sales are performing very well.” He declined to give specific figures.

‘Normal Clothes for Normal People’

Can Lord & Taylor be relevant today? It began to lose prestige during the 1980’s, when the store tried to bring in more kinds of customers with less-expensive merchandise. In 2003, the May Company closed 32 poorly performing stores in 15 states. But the flagship persists, in some kind of purgatory floating state between Bloomingdale’s, which gamely opened a hip young Soho branch in 2004, and B. Altman (R.I.P.).

Founded in 1826, Lord & Taylor was originally retailer to New York’s upper class. It was the first department store to have “fixed prices,” meaning no discounts. And in the early part of the 20th century, it was nose to nose in elegance with Saks Fifth Avenue and Bonwit Teller.

The name alone implies a lordliness and a tailored look, though it comes from the two men who started with bolts of fabric in a basement on Catherine Street,what is now the Brooklyn Bridge, where the fabrics came in: Samuel Lord, the youngest of nine orphans, and his wife’s cousin, George Washington Taylor, according to the store’s official publication, The History of Lord & Taylor, 1826-2001.

Moving up the escalator in the grand 10-story 1914 Italian Renaissance structure by StarRett and Van Vleck (also the architects of Saks Fifth Avenue), noting the sparkle of the mirrored columns below and the opaque white-glass hanging fixtures, one can’t help reaching for a handkerchief (and Lord & Taylor still sells them!) thinking of the millennial retail revolution, in which the classic department store is no longer the absolute be-all and end-all for shoppers.

Beginning after World War II, people who moved to the suburbs started going to malls, not just for the two department stores that usually flanked a mall but for all the choices between those two stores. Today, those fleeing back to the city want not one store but the chain stores of their suburban youth, or boutiques of specialness—and then, of course, there are the stores on the Internet, as many as stars in the universe.

Arriving on the second floor of Lord & Taylor, where hundreds of shoes are in circular, suburban-Nordstrom-like displays, a black shoe stepping on the toe of a brown one, with the music playing (“I think we can make it, one morrrrre time…”), a new customer demographic could be seen: a woman with very short cut-offs and rubber flip-flops, her husband in a T-shirt with small type reading “Life is good.”

Where is the woman who leafed through a Town & Country magazine in 1953 and came to shop “for the first cool days of autumn … Rodier wool tweed … by Charles James … the dramatic winged neckline, the Empire belt in velvet …, ” or though Vogue in 1948 for the “high-waisted coat over a simple lilac wool jersey dress by Trigère?” Where is the snap of the handbag and a chicken salad at lunch instead of all those people who roll around in front of giant televisions looking for something to put in their mouths?

The woman with the handbag wasn’t there, but one Wednesday evening Lorna Stevens, 62, with short white hair and comfortable black suede shoes, who has worked for the last 20 years in humanitarian relief and lives in Peter Cooper Village, was staring at the store directory looking for “Intimate Apparel.” She said she has been coming to Lord & Taylor forever. “I was just looking for Jockey shorts for my husband. They have Polo, Ralph Lauren—no Jockey. They used to. I’ve been shopping here my whole life. Barneys, Bergdorf’s? It’s not for me. This is where I go. Before I came here, I went to B. Altman. Here, you can count on being able to get normal clothes for normal people.”

Also shopping was Nora Loke, 58, who lives in Chinatown with her husband, an accountant, and who moved from Hong Kong 20 years ago. “I like the classic clothes—very American,” she said, indicating a Nine West mannequin. “Saks Fifth Avenue? That’s very expensive. An umbrella is $24. Here it’s very quiet, you feel comfortable. Sometimes my husband comes. He sits in a chair and goes to …. ” She put her head down and mimed sleep.

It became apparent that what everyone was loving was the big open space of Lord & Taylor, where they could rest. On the eighth floor, there was one saleswoman alone with all the bras, a half-floor full. (Wasn’t she afraid?) There was a whole other floor full of miniature children’s sweaters and some bears and no people. The store is 600,000 square feet! There is no place in the city with this much space per person. The reading room at the public library is more crowded.

“I think the store could be more profitable per square foot if it were partly smaller,” Mr. Baker said on the phone.

‘It Should Be More Glamorous’

But retail’s ruling elite is rooting for Lord & Taylor to dig in and self-aggrandize.

“I don’t think you can judge Lord & Taylor by the traffic in their Fifth Avenue store,” said former Bloomingdale’s chairman and chief executive Marvin Traub. “They have a number of stores doing well outside New York. With Federated combining Macy and May Company stores essentially aimed at middle-priced lines, it represents a considerable opportunity for the new owners to move Lord & Taylor a little more up-market.

“Lord & Taylor for many years had a fine reputation in the city,” Mr. Traub said. “Reputations last a long time.”

“ Look at that store. It’s big and gorgeous,” says Gloria Gelfand, the former president of Escada and Louis Feráud and vice president of Salvatore Ferragamo ready-to-wear, talking from Maryland in the middle of a hurricane. “It could bring back the proper customer.”

Ms. Gelfand, who now has her own consulting company, began her 62-year-career at a company called White Stag. “The first female blue jeans in the world,” she said. “It was Lord & Taylor that bought the first three dozen pieces. Dorothy Shaver, one of the greatest fashion merchants of all time—a woman who understood how to build an empire!” Ms. Shaver was the first woman president of a major store on Fifth Avenue; her photograph in The History of Lord & Taylor looks like Joan Crawford. “When White Stag came out with the first multiple pieces of sportswear,” Ms. Gelfand said, “not only did they introduce it, they set up an entire floor for it. Then what did Dorothy Shaver do? She brings in the incredible, fantastic Claire McCardell. Two years after that, Dorothy Shaver introduces Bonnie Cashin and brings the whole world of sportswear up a level in price and sophistication. And then she wasn’t finished: Dorothy Shaver introduces Rudy Gernreich. She did it all. Of course, she had Norell, Bill Blass and …. ”

Ms. Shaver’s first association with the store in 1921, according to the book, involved marketing a family of dolls made by her sister, called the “Five Little Shavers.” Dolls seem to be a recurrent theme at Lord & Taylor—though maybe all fashion is about dolls. But the store’s Christmas windows have been a long-famous favorite of the avenue, with their little Victorian moments—a man with a mustache, his arm bent at the elbow, trying to hold a present, or a woman in a bonnet on a steamboat, which was part of the 2004 celebration of the U.S. Postal Service. To be fair, the art department has also brought in artists Larry Rivers, Red Grooms. They re-created the streets of San Miguel.

“The new owners have to make the store more appealing,” Mr. Traub said. “I think Jane has been trying to move it. But she has had limited money.”

“Jane had a vision to create a store that truly was her store,” said Lavelle Olexa, senior vice president of advertising and sales promotion for Lord & Taylor. “She typified that customer who was a career woman, for whom time is extraordinarily important to her. Her focus was more to the 35 to the 50. In the past several years, that demographic has really widened, become 25 to 55. Though she never really deserted her core customer. She brought in more contemporary looks for 25 to 35—Sui, Nicole Farhi, Vivienne Tam, Jill Stewart, BCBG. She has elevated the looking of the advertising—very clean, modern.”

“There’s a Renaissance Jane Elfers has achieved,” said Arnold Aronson, the former chairman of Saks Fifth Avenue and the managing director of retail strategies for Kurt Salmon Associates. “Jane’s a wonderful retailer—very focused apparel, excellent management. What she did is just a beginning. Federated, while they owned it, made substantial investments in upgrading the infrastructure. Lord & Taylor could end up being a viable regional, metro-oriented specialty department store. A lot of customers recognize the name and regard it with a positive image.”

“It should be glamorous, the sophisticated, beautiful home of exciting product,” Ms. Gelfand said. “Look …. ” She paused. “They need to get in the daughter of the baby boomer— 28 to 35, honey …. ” Dear Lord & Taylor, Retail's Resting Place