The Bear’s Lair: Triumph of the Naff

Lord & Taylor’s bankruptcy this week closely followed on that of Brooks Brothers. That suggests a common trend, a Götterdämmerung of the preppie WASP. Certainly, other factors, the COVID-19 lockdowns and the ineptitude of private equity, played a role also. But there is an overall zeitgeist at work, social as well as economic, and it portends a scruffy, style-less down-market future.

Both Brooks Brothers, founded in 1818 and Lord & Taylor, founded in 1825, based within a few blocks of each other in New York, epitomized the ”buttoned-down” WASP aesthetic. Brooks had a slightly gamier early history, being sued for poor quality on its Civil War uniforms, but it has now clothed 41 of the 45 U.S. Presidents, with its notable absentees being Jimmy Carter and Ronald Reagan. It reached its apogee in the “Mad Men” era of the 1960s, when its impeccable tailoring and “preppy” look gave a veneer of WASP preppy social acceptability to people whose true backgrounds may have been nothing of the kind.

Lord & Taylor can claim to have been the oldest U.S. department store, founded by Samuel Lord, who was joined in 1834 by his wife’s cousin, George Washington Taylor. Both were British immigrants, and the company flourished at the top end of the market, catering to New York high society and the much larger group of wannabe high society. Its apogee was also in the post-World War II era, when it was one of the first substantial companies with a woman boss, Dorothy Shaver (1893-1959). Shaver gave the store the necessary prestige among high-income women, establishing its interior decorating department in 1921, undertaking “fashion exhibitions” that included Picasso paintings, and presiding over its post-war expansion into suburban locations.

In my own youth, both Brooks Brothers and Lord & Taylor were essential parts of my lifestyle as a not-very-affluent New York banker, unsure of how to adjust middle-class English taste to American living. Brooks Brothers gave me an assurance that my suits would be acceptable in the very conservative banking environment, since I could not afford to wear tailor-made suits at New York prices, which were much higher than those of British provincial tailors. It must be said that the quality and durability of Brooks’ cloth was not equal to those of tailor-made British suits, but I put that down to the American penchant for planned obsolescence.

Brooks Brothers had the advantage that even when I turned a liking for Robert Redford’s look in “The Great Gatsby” (1974 version) and a feeling that English suits were too hot in the American summer into a rather unfortunate confection in peach-colored silk, I could still wear it to the office in the knowledge that it was a Brooks Brothers confection in peach-colored silk, so was thus above reasonable criticism. With Brooks on the label, the claim that I looked like “Boss Hogg” of the Dukes of Hazzard rather than Robert Redford counted as unreasonable criticism!

Lord & Taylor was always a very useful source of gifts for young ladies; the bags alone produced a warm, friendly atmosphere (the blue Tiffany bags did even better, but alas I was not in an income bracket to afford more than pathetically small Tiffany gifts). I could also be confident that WASP-y young ladies, from either side of the Atlantic, would like the contents of a Lord & Taylor bag and find them in “good taste.” However, Lord &Taylor came into its own for me a few years later, when I discovered it was the only place in the world where I could get truly satisfactory bath towels – really soft, extra absorbent and absolutely gigantic. (Presumably the estimable Dorothy Shaver had devoted her considerable capability and intellect, at some time around 1955, to sourcing Lord & Taylor towels, and thereby had solved the towel conundrum for all time, or so it appeared.)

Some time in the 1990s, both companies lost their magic. Brooks Brothers was taken over by the British Marks & Spencer in 1988; that company had a fine reputation for quality control, but at a lower price level – it did well by squeezing suppliers, rather as Walmart does. In any case, the merger did not work, as most trans-national acquisitions in the retail sector don’t. In 2001 Brooks Brothers was sold during a period of downsizing and cost-cutting at Marks & Spencer (which has suffered through several such since) to a holding company controlled by an Italian billionaire without a background in the apparel business.

Lord & Taylor was sold in 1986 to the mass-market department store May & Co., a similar mistake to the sale of Brooks to Marks & Spencer. In 2005, May was acquired by a larger department store group, Federated Department Stores, which promptly sold Lord & Taylor to a private equity company, which in 2008 bought Hudson’s Bay Company, and positioned Lord & Taylor within Hudson’s Bay (where it joined another upmarket department store chain, Saks Fifth Avenue.) Over the next decade, in typical private equity fashion, the real estate was asset-stripped; Lord & Taylor’s flagship store on Fifth Avenue being sold to the ineffable WeWork in 2017, after $850 million had been spent on its refurbishment. The chain was finally sold to an undercapitalized acquirer, Le Tote, in 2019; being undercapitalized Le Tote has now been forced to file for Chapter 11 bankruptcy.

Needless to say, with all these changes in ownership, product quality has suffered. To be fair, my own need for Brooks was greatly lessened in 2000, when I switched from being a banker to a journalist, and joined the world of scruffy “intellectuals” — these days I use Brooks primarily for underwear. Lord & Taylor’s bags are still nice, but last time I looked it had ceased selling towels; presumably one of its various retail owners had decided that towels were not as profitable per square foot as cosmetics. As for its other offerings, my very inexpert eye sees them as no longer different from those of other department stores, no longer a tribute to the exquisite British good taste of the purchaser – which was rather the point of shopping there, otherwise one could just grab the nearest handbag from Macy’s.

Lord & Taylor’s decline and demise may have been inevitable; private equity ownership does this to everything it touches, and a unique high-end retailing experience is sufficiently difficult to preserve that private equity is surely incapable of preserving it. This is a pity; good reserved WASPy taste in clothing is still demanded by the market, and young men will still pay a modest premium to be assured of getting it when they shop for their girlfriends. As for towels, you can buy an infinite assortment of towels off Amazon, but I fancy they are all made in China, and none of them have the softness and absorption capacity of Lord & Taylor’s best – I have been using my last 1986 Lord and Taylor’s towel until it is worn into shreds, because of my inability to replace it adequately after several expensive attempts.

Brooks’ demise, on the other hand, surely reflects the decline, not of the preppy WASP, but of the need for him to dress up for the office. Equivalent services that do not involve suits, such as shirt suppliers, still seem to be thriving. (My own favorite, the London Harvie and Hudson, surprised me when I last went in, in 2010, by its shirts being a third cheaper than on my previous visit ten years earlier. The salesmen, shaking his head as a good traditionalist should, explained that they were no longer sourced in England, and so enjoyed vast savings. There was a slight decline in quality, but not much, and anyway over that decade there had also been a decline in quality of the body onto which they were being fitted – I am now even more of a shapeless spherical blob than I was.) So Brooks, if it had been able to keep its finger on the pulse of the market, should still have thrived. I am therefore compelled to believe that, even though not owned by private equity, it failed to keep its finger on the pulse of the market.

Sic transit Gloria mundi. To some extent, as I age out of the prime purchasing power years, I must expect that the product offerings tailored to my tastes will gradually disappear. No doubt the powder-blue woolly jumpsuits of 2200, apart from looking terrible on me, will also displease me aesthetically (the styles of 1800, on the other hand, would have suited me fine, provided I had a valet). Still I can’t help feeling that a Brooks Brothers powder-blue jumpsuit would even in 2200 have a certain je ne sais quoi. And surely, the sublime Dorothy Shaver-selected towels would still be in demand in 2200, if any suitable store were left to sell them.

(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)