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(BUSINESS WIRE) — New York In a partnership between HBC and renowned growth capital investor Insight Partners, Saks Fifth Avenue’s online store will now operate independently under the name Saks. Saks now has a $2 billion market value thanks to a $500 million minority equity investment from Insight Partners. The 40-store fleet of the retailer will operate independently as SFA, a company that is still completely controlled by HBC. Saks and SFA will be better able to properly plan for and invest in their unique service models because they are sister firms that are distinct yet connected.
“Luxury e-commerce is poised for exponential development, and as an independent digital firm with an already strong presence in luxury, Saks is primed to earn considerable market share,” stated HBC Governor, Executive Chairman, and CEO Richard Baker. We are reinventing the luxury retail landscape with this move, powered by an incredible client base, unmatched brand equity, enduring partnerships with leading designers, and magnificent storefronts in premier markets across North America. Customers will have an unrivaled shopping experience thanks to the team’s fashion knowledge and a renewed focus on digital. This transaction also confirms HBC’s capacity to significantly increase the value of our company’s assets. We are excited to work with Insight Partners, a company that is well-known for scaling Internet, software, and e-commerce leaders, to help Saks realize its full potential as the leading luxury e-commerce platform.
Former Saks Fifth Avenue President and CEO Marc Metrick will lead the company as CEO and a member of the board of directors. Saks will make wise investments under his direction to develop and improve its web presence. Through enhanced styling capabilities and data-driven personalization, these investments will boost Saks’ already strong digital business, beginning with its service model. Saks will eventually have a hybrid retail and marketplace platform that will allow it to grow its selection while maintaining a tailored experience.
“For the past few years, Marc’s leadership of Saks Fifth Avenue has driven a dramatic overhaul of the brand and consumer experience,” Baker continued. His efforts, combined with those of his knowledgeable management team, allowed the company to achieve top-line growth that is unmatched in the sector and outstanding market penetration. Because of this, I have no doubt that he will provide Saks with the same inventive leadership as it begins its path as a stand-alone e-commerce company.
“Our consumers have enjoyed and trusted the Saks Fifth Avenue shopping experience for nearly a century, solidifying the brand as a leading fashion authority and raising the bar in luxury retail,” said Mr. Metrick. As a stand-alone business, we’re in a great position to make the necessary investments to spur exponential development and provide the same top-notch service online. The potential that lies ahead for our clients and vendor partners inspires us. This marks a crucial turning point in Saks’ upcoming century as a premier retailer of luxury goods.
Sebastian Gunningham will become a director and an advisor for the company as a result of Saks’ conversion to an online retailer. In his prior role as a member of Amazon’s executive team, Mr. Gunningham oversaw the company’s marketplace expansion in addition to other significant technological and operational divisions. Together with other senior positions at renowned companies, he has also held top positions at Apple and Oracle.
Deven Parekh, the managing director of Insight Partners, continued, “Luxury e-commerce is an extraordinarily resilient, high-growth market, and we are pleased to invest in a historic, century-old brand that has so effectively transitioned to a native digital approach. By constantly reinventing itself while adhering to its strategy of being the top partner of choice for so many top global companies, Saks has flourished. We look forward to working with Marc and the rest of his management group as they continue to grow their customer base globally and establish themselves as the industry leader in luxury e-commerce.
The name that both companies will use to address customers will continue to be Saks Fifth Avenue. Together, Saks and SFA will continue to provide a seamless consumer experience. Both online and offline, SaksFirst credit cards will still be accepted, along with returns and exchanges.
While the stores will carry out the physical operations of Saks, such as Buy Online, Pick Up In-Store, Exchanges, Returns, and Modifications, Saks will oversee marketing and merchandising across both businesses. The intellectual property for Saks Fifth Avenue, including the name and visual identity, will remain under Saks’ ownership and management.
The new president of SFA, Larry Bruce, will answer directly to Mr. Baker. Mr. Bruce has worked for Saks Fifth Avenue for almost 20 years and has been the director of stores for the last 8 of those years.
“The Saks Fifth Avenue brand is based on giving the best in fashion and beauty,” Mr. Metrick continued. While the physical storefronts will still be a crucial customer touchpoint, Saks’ growing online presence will increase brand awareness. I am confident that Larry will continue to lead the retail fleet into the future. We anticipate keeping up a mutually beneficial connection and cooperating to offer a seamless consumer experience across all channels.
Businesses that operate at the nexus of retail, technology, and real estate have a lot of potentials, according to Franz-Ferdinand Buerstedde, Managing Director at Rhône Capital. We are excited that this deal has been finalized and are sure that it will generate a lot of value. The decision to increase Saks’ e-commerce selection while maintaining customer service at its strategically placed store locations will be advantageous to both parties and further establish the Saks Fifth Avenue name as the undisputed leader in luxury retail.