HBC Spins Saks.com Into Separate Business

HBC Spins Saks.com Into Separate Business

HBC Spins Saks.com Into Separate Business
HBC Spins Saks.com Into Separate Business
Retail Bum

Retail Bum

Retail Bum

Retail Bum

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Saks Fifth Avenue’s parent company HBC plans to spin the company’s brick and mortar and online business into two separate entities.

The company’s announcement comes on the heels of a $500 million investment from Insight Partners. The investment gives the venture capital firm a minority stake in Saks.com and values the business at $2 billion.

Saks’ footprint of 40 brick-and-mortar stores will become a separate business, which will be known as SFA and will be fully owned by Saks’ parent company.

The two companies will work in conjunction to deliver a seamless buying experience in-store and online. Saks is expected to lead marketing and merchandising across both businesses, whereas the brick and mortar stores will fulfill the physical functions of Saks, such as Buy Online, Pick Up In-Store, exchanges, returns and alterations.

“With this move, we are redefining the luxury shopping ecosystem,” said HBC CEO Richard Baker in a statement. “Luxury ecommerce is poised for exponential growth, and as a standalone digital company with an existing strong position in luxury, Saks is primed to win significant market share,” he added, noting SFA’s 100-year-old brand status and legacy of reinventing itself.

Saks Chief Executive Marc Metrick will become the CEO of the company’s online business, while Saks veteran Larry Bruce will oversee the SFA business as the company’s president and will be reporting to Baker. Former Amazon executive Sebastian Gunninghamis will also be joining the eCommerce company’s board.

Saks’ parent company HBC was taken private last year by a group of shareholders, including Baker, according to CNBC. HBC is also the parent company to the Canadian department store chain Hudson’s Bay and discount business Saks Off Fifth.

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