As department stores like Saks Fifth Avenue try to bring customers back to stores after the Covid-19 pandemic shutdown, the move to online sales may accelerate further thanks to personalization technology.
Richard Lautens | Toronto Star | Getty Images
HBC, the owner of Saks Fifth Avenue, said Friday that the luxury department store’s website will be split into a separate store after raising $ 500 million.
Venture capital firm Insight Partners raised $ 500 million to acquire a minority stake in Saks.com and valued the company at $ 2 billion. Saks’ 40 brick and mortar stores will become a separate company called SFA, wholly owned by HBC.
The Covid pandemic has pushed consumers to shift their spending online, with several luxury retailers proving their resilience. Wealthy buyers have chosen high quality handbags, jewelry and other accessories.
“Luxury e-commerce is set to grow exponentially,” said Richard Baker, CEO of HBC, in a statement.
Marc Metrick, who was managing director of the combined Saks business, will become CEO of the new digital company. Former Amazon CEO Sebastian Gunningham joins the e-commerce company’s board of directors, and Saks veteran Larry Bruce has been named president of the SFA business reporting to Baker.
HBC was privatized last year by a group of shareholders including Baker. HBC also owns the Hudson’s Bay department store chain in Canada and the discount store Saks Off Fifth.
“Luxury e-commerce is an exceptionally resilient, high-growth sector,” said Deven Parekh, managing director of Insight Partners.
Insight Partners has also made other investments in technology and software companies Shopify and Qualtrics.