What: Saks Fifth Avenue has secured increased credit facilities as part of its e-commerce strategy.

Why it is important: While customers eagerly return to malls and stores as pandemic restrictions lift, Saks is using capital to invest in winning the e-commerce battle between Mytheresa, neimanmarcus.com, Moda Operandi, Net-a-porter, Farfetch and Matchesfashion.

Looking to grow its luxury e-commerce Saks raised its existing Bank of America arranged asset-based revolving credit facility from 350 million USD to 450 million USD. As well, the company closed on a 60 million USD “upsize” facility resulting in a total credit facility of 175 million USD. Securing the additional financing will be used to improve its technology, marketing, contact centers, customer acquisition efforts and to enhance its shopping experience with personalization, styling services and shipping and return options. The user experience through appearance and navigation has also been a point of improvement for the company.

In March 2021, the parent company, HBC, leveraged its new business model, equity partner and stronger balance sheet to split the Saks Fifth Avenue store fleet and Saks.com into separate companies. Some have speculated that the division of the Saks Fifth Avenue stores and e-commerce businesses into separate companies is a step to potentially turning the e-commerce operation into a public company, depending on market conditions.

Insight Partners made a 500 million USD minority equity investment in the Saks e-commerce business, valuing it at 2 billion USD.

Saks acquires more capital to grow e-commerce