While department stores like Saks Fifth Avenue are trying to get shoppers back to stores after the Covid-19 pandemic shutdowns, the shift toward online sales may continue to accelerate thanks to personalization technology.
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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.
It was said that venture capital firm Insight Partners has amassed $ 500 million to take a minority stake in Saks.com, valuing the business at $ 2 billion. Saks ’40 mortar stores will become a separate business known as SFA, which will remain wholly owned by HBC.
The Covid pandemic has motivated consumers to change their online spending, and several luxury retailers are showing resistance. Well-to-do shoppers have enjoyed high-end handbags, jewelry and other accessories.
“Luxury e-commerce is on the verge of growing exponentially,” Richard Baker, CEO of HBC, said in a statement.
Marc Metrick, who was executive director of Saks’s combined companies, will become CEO of the new digital company. Former 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.
“Luxury e-commerce is an exceptionally resilient growth sector,” said Deven Parekh, CEO of Insight Partners.
Some of Insight Partners ’other investments include technology and software companies Shopify and Qualtrics.