HBC, owner of Saks Fifth Avenue, said Friday it will split the luxury department store website into a separate business from its stores after raising $ 500 million.
The separation allows Saks.com, which has annual sales of about $ 1 billion, to raise money to fuel its growth, the company said. E-commerce has experienced explosive growth during the coronavirus pandemic, with several luxury retailers showing resilience.
“Luxury e-commerce is about to grow exponentially,” Richard Baker, executive director of HBC, said Friday. “Saks is poised to gain significant market share.”
HBC said few changes will be noticeable to customers. Saks Fifth Avenue will continue to be the brand for both stores and e-commerce, and shoppers will be able to shop online and pick up their in-store purchases. They will also be able to make returns and exchanges with their Saks credit cards in stores or online, the company said. The online business will oversee the marketing and merchandising of both segments.
Venture capital firm Insight Partners has contributed $ 500 million for a minority stake in Saks.com, giving the business a $ 2 billion valuation. The money will be used to invest in faster shipments, simpler returns and better customer service. Saks ’40 brick shops will become a separate business known as SFA, which will remain wholly owned by HBC.
Marc Metrick, who was CEO of Saks Combined Companies, will become CEO of the new digital company.
Metrick unveiled the derivation and added, “As an independent company, we are well positioned to make the right investments to drive exponential growth and deliver the same exceptional online experience.”
Former WeWork and Amazon executive Sebastian Gunningham joins the e-commerce company’s board of directors, and Saks veteran Larry Bruce has been named chairman of the SFA business, Baker reported.
HBC was privatized last year by a group of shareholders that includes Baker. HBC also owns the Hudson Bay department store chain in Canada and the Saks Off Fifth discount business.
Other investment e-commerce platform from Insight Partners Shopify, social networking site, Twitter food kit service and subscription, Hello Fresh.