Low rates in the Lord & Taylor accord

Low interest rates have contributed to the structure of the recent online clothing rental Lever announced Thursday at CNBC the purchase of US retailer Lord & Taylor, CEO Thursday told CEO Rakesh Tondon.

"Absolutely, the market is ideal for debt at the present time and the rates are really affordable," said Tondon about "Squawk Box". "So we thought it made a lot of sense to finance that with a debt."

In the United States, borrowing costs could fall further, as the Federal Reserve plans a further rate cut at its September monetary policy meeting. The market expects the Fed to announce a quarter-point reduction on September 18, identical to July's, the first reduction in more than a decade.

Tondon's remarks on the benefits of low rates come a day after The Tote announces the purchase of Lord & Taylor at the Canadian Hudson's Bay Company for $ 100 million. The Tote, still looking for funding, will take over the brand and intellectual property of Lord & Taylor. Hudson's Bay will retain ownership of Lord & Taylor properties.

Hudson's Bay, which also owns the famous New York brand Saks Fifth Avenue, has finalized the acquisition of Lord & Taylor in 2012 – the same year that The Tote was founded in San Francisco.

Tondon said The Tote planned to open its own stores, but that the opportunity to achieve economies of scale quickly by acquiring an established brand like Lord & Taylor was more appealing. "What we are trying to do is to merge tradition with technology," he said.

The Tote subscribers, who pay $ 79 a month to rent clothes and accessories, had asked for "ephemeral workplaces, shops where they could come touching products before making" the decision to potentially buy online, "said Tondon." We're going where customers are asking us to go. "

Lord & Taylor, one of the oldest department stores in the country, was founded in 1826 in New York. The retailer, which currently has 38 stores, has struggled in recent years as online retail giant Amazon and newcomers such as The Tote have reversed the traditional business landscape.