As department stores like Saks Fifth Avenue try to get shoppers back into stores after pandemic Covid-19 closures, the shift to online sales may continue to accelerate thanks to personalization technology.
Richard Lautens | Toronto Star | fake images
HBC, the owner of Saks Fifth Avenue, said Friday that it will divide the luxury department store’s website into a separate business from its stores after raising $ 500 million.
He said venture capital firm Insight Partners has contributed $ 500 million to take a minority stake in Saks.com, valuing the business at $ 2 billion. Saks’ 40 physical stores will become a separate business known as SFA, which will remain wholly owned by HBC.
The Covid pandemic has prompted consumers to shift their spending online, and several luxury retailers have shown resistance. Wealthy shoppers have been splurging on high-end bags, jewelry, and other accessories.
“Luxury e-commerce is poised for exponential growth,” HBC Chief Executive Richard Baker said in a statement.
Marc Metrick, who was CEO of Saks’ combined businesses, will become CEO of the new digital company. Former Amazon executive Sebastian Gunningham joins the e-commerce company’s board, and Saks veteran Larry Bruce has been named president of SFA’s business, reporting to Baker.
HBC went private 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 high-growth industry,” said Insight Partners CEO Deven Parekh.
Some of Insight Partners’ other investments include technology and software companies Shopify and Qualtrics.