Hudson's Bay's (OTC:HBAY.F) Lord & Taylor chain, founded in 1826, is the oldest department store chain still operating in the United States. However, Lord & Taylor has been struggling in recent years, as it failed to adapt to changing shopping habits and the growth of e-commerce as quickly as rivals like Nordstrom (NYSE:JWN).

As a result, Lord & Taylor closed two of its 50 full-line stores earlier this year, leaving it with 48 locations concentrated heavily in the Northeast. Back in June, Hudson's Bay announced that it will move more aggressively to right-size the iconic department store chain's footprint in 2019, by shuttering up to 10 more stores. Let's take a look at where Lord & Taylor is likely to close stores in the coming year.

What we already know

Three of the upcoming Lord & Taylor store closures have already been made public. In late 2017, Hudson's Bay struck a lucrative deal to sell the Lord & Taylor flagship store in Manhattan to an affiliate of WeWork for $850 million. While it initially planned to lease back 150,000 square feet for a smaller store, the company later changed direction and announced that the flagship store would close altogether in January 2019.

Earlier this year, Lord & Taylor confirmed that it will not renew the lease for its store at Oakbrook Center in the Chicago suburbs when it expires in January. Finally, a few months ago, Lord & Taylor decided to close its store at Monmouth Mall in suburban New Jersey, as that mall is slated for an extensive redevelopment. This location is also set to close next month.

Where else could Lord & Taylor close stores?

While Lord & Taylor has announced these three store closures, that still leaves about seven more that have not been identified yet. Fortunately, management provided a big clue six months ago.

During Hudson's Bay's Q1 earnings call, CFO Ed Record said that none of the Lord & Taylor stores covered by the company's North American real estate joint venture were likely to close. This joint venture with Simon Property Group and other big institutional investors is a vehicle to take outside investment in Hudson's Bay's top-notch real estate and showcase its value to investors.

Of Lord & Taylor's 45 full-line locations not already slated for closure, 30 have been contributed to the joint venture. In other words, the seven remaining store closures will likely come from a pool of 15 possible stores.

Stores in underperforming malls and ones near other Lord & Taylor locations are most likely to get the ax. For example, the chain currently has seven stores in the northern and western suburbs of Washington, D.C. -- far more than it needs. The locations in Gaithersburg and Kensington, Maryland; Washington, D.C.; and Sterling, Virginia, aren't part of the Hudson's Bay joint ventures. Lord & Taylor could look to close two or even three of those stores.

About half of Lord & Taylor's stores are in the greater New York region, meaning that there is a lot of store overlap there as well. However, nearly all of these locations are in the real estate joint venture. The Trumbull, Connecticut, store is one likely candidate for closure. There are two other Lord & Taylor stores 25 miles away in far more desirable locations. Furthermore, that store is about to face much tougher competition with the opening of a new mall anchored by Nordstrom and Bloomingdale's in late 2019.

A relatively new store in Yonkers, New York, also may be closed, as it sits just five miles from Lord & Taylor's extremely successful store in Eastchester.

Elsewhere in the Northeast, the Moorestown Mall store east of Philadelphia may be closed. Lord & Taylor's two stores in the western suburbs are in great locations, whereas Moorestown Mall is overshadowed by the much more successful Cherry Hill Mall (anchored by Nordstrom and Macy's) three miles away. The downtown Boston store could be eliminated as well, given that it is ringed by three other Lord & Taylor locations, all within 20 miles or less.

In other regions, Lord & Taylor could look to close its location at the struggling Lakeside Mall near Detroit. The nearby Mall at Partridge Creek (also anchored by Nordstrom) has a much better tenant mix to attract well-to-do shoppers. The only other full-line Lord & Taylor store in the area is 40 miles away, but it still may not make sense to keep the Lakeside store open.

Finally, Lord & Taylor will have to decide whether or not to keep its Boca Raton, Florida, store open. While that area is home to lots of transplants from the New York area who may be longtime customers, it is 1,000 miles away from any other Lord & Taylor stores, which undoubtedly adds costs and operational complexity.

It depends on what Hudson's Bay can negotiate

Obviously, sales and profitability are the main factors Hudson's Bay will consider when deciding which Lord & Taylor stores to close in 2019. That said, the terms of its leases -- and the desirability of the underlying real estate -- will also affect the calculus.

For a store with an expiring lease, closing up shop is straightforward. But for a store where Lord & Taylor is locked into a long-term lease, the company would want to negotiate a buyout with the landlord. Hudson's Bay was able to negotiate favorable lease buyouts for the two stores it closed earlier this year. The mall owner was so eager to redevelop those properties that it paid Lord & Taylor to leave.

Landlords' willingness to make similar concessions -- or at least to keep any termination fees modest -- will undoubtedly have some impact on Lord & Taylor's final decisions.