HBC, the owner of Saks Fifth Avenue, said on Friday that it would split the luxury department store website from its store into a separate business after raising $ 500 million.
The company said that Sax.com’s annual sales had increased by about $ 1 billion, which would boost its growth. E-commerce has experienced explosive growth during the coronovirus epidemic, with many luxury retailers showing resilience.
“Luxury ecommerce is poised for rapid growth,” HBC chief executive Richard Baker said on Friday. “Sachs has a chance to win significant market share.”
HBC said some changes would be noticeable to customers. Saks Fifth Avenue will remain the brand name for both store and e-commerce businesses and shoppers will be able to shop online and do their shopping in stores. The company said that they would be able to return and exchange using their Saks credit card or even from online stores. The online business will oversee marketing and sales for both sectors.
Venture-capital firm Insight Partners has traded $ 500 million for a minority stake in Saks.com, leaving the business with a $ 2 billion discount. The money will be used to invest in faster shipping, easier returns and better customer service, with Saks’s 40 brick-and-mortar store becoming a separate business known as SFA, which will remain wholly owned by HBC .
Mark Metrick, who was CEO of United Sax businesses, is set to become CEO of the new digital company.
“As a standalone company, we are well positioned to make reasonable investments to drive exponential growth and deliver the same exceptional experience online,” Metric said to the spinoff.
Former WeWork and Amazon have included Sebastian Gunningham on the board of the e-commerce company, and Sachs veteran Larry Bruce has been appointed chairman of the SFA business, reporting to Baker.
HBC was taken private by a group of shareholders last year, including Baker. HBC also owns the Hudson’s Bay department store chain in Canada, and the discount business Saks of Fifth.
Insight Partners’ other investments include e-commerce platform Shopify, social media site, Twitter and subscription meal kit service, Hello Fresh.
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