As department stores like Saks Fifth Avenue try to get shoppers back into stores after the Covid-19 pandemic shutdowns, the shift to online sales may continue to accelerate thanks to personalization technology.
Richard Lautens | Toronto Star | Getty Images
HBC, the owner of Saks Fifth Avenue, said Friday it would be spinning the luxury department store’s website into a separate business from its stores after it raised $500 million.
The venture capital firm Insight Partners has put up $500 million to take a minority stake in Saks.com, valuing the business at $2 billion, the company said in a press release. Saks’ 40 brick-and-mortar stores will become a separate business known as SFA, which will remain wholly-owned by HBC, the company said.
The move comes as the Covid pandemic has prompted consumers to shift their spending online, with a number of luxury retailers showing resilience. Shoppers with more money to spend have splurged on high-end handbags, jewelry and other accessories.
“Luxury ecommerce is poised for exponential growth,” HBC Chief Executive Officer Richard Baker said in a statement.
Marc Metrick, who previously served as the CEO of the combined Saks businesses, is set to become CEO of the new digital company. Former Amazon exec Sebastian Gunningham is also joining the e-commerce company’s board. Saks veteran Larry Bruce has been appointed president of the SFA business, reporting to Baker.
HBC was taken private last year by a group of shareholders that includes Baker. HBC also owns the Hudson’s Bay department store chain in Canada, and the discount business Saks Off Fifth.
“Luxury ecommerce is an exceptionally resilient high-growth sector,” said Insight Partners’ Managing Director Deven Parekh.
Some of Insight Partners’ other investments include the tech and software companies Shopify and Qualtrics.