Landmark Lord & Taylor building too expensive for WeWork: report
WeWork's bet on the landmark Lord & Taylor building known for its holiday displays along Fifth Avenue — seemingly didn't pay off, another setback for the besieged company.
WeWork can no longer afford to move into the department-store chain’s historic flagship after agreeing to a long-term lease, according to The New York Post, citing sources it didn’t identify.
Just recently, employees of the communal office-space company were notified of the change-up, chalking it up to the stiff lease of $105 per square foot-- well above the typical price point for buildings in the area, the outlet said.
Lord and Taylor
The nearly 100-year-old building, which helped define Christmas in New York, was slated to become the company's headquarters after WeWork and other several investors closed an $850 million deal to buy the Fifth Avenue building.
The sale was seen as exemplifying a shifting economy in which brick-and-mortar retail have taken a hit from online sales.
In June, Hudson's Bay Co., the Canadian behemoth that has owned Lord & Taylor since 2012, announced it was closing various stores due to the company's "increasing focus on its digital opportunity and commitment to improving profitability."
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This comes after WeWork, which pulled its initial public offering amid scrutiny of its debt and mounting financial losses, delayed layoffs of thousands of employees because it didn't have the cash for their severance pay, the Wall Steet Journal reported, citing sources.
WeWork's decline, however, was countered by a rescue offer from the company's largest investor, SoftBank. The deal reached this week will give the Japanese conglomerate an 80 percent stake in WeWork when it closes, valuing the company at about $8 billion.
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WeWork was valued at $47 billion at the time of SoftBank’s last investment – in January. The company pulled its public offering on Oct. 1 after its market value was estimated at just $10 billion to $12 billion.
WeWork declined to comment.
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The Associated Press and FOX Business' Jonathan Garber contributed to this report.