What: Saks pushes into luxury ecommerce

Why is it important: online experience will evolve and expand with “a hybrid retail and marketplace platform”

Hudson Bay, with USD 500 million from private equity firm Insight Partners, is establishing a standalone e-commerce company known as "Saks." Marc Metrick, who has been running Saks Fifth Avenue, will be CEO. The private equity firm will take a minority stake in the new company, which is valued at USD 2 billion.

The department store's 40-store fleet will operate separately as "SFA" and remain wholly owned by HBC. "Saks Fifth Avenue" will be the customer-facing branding for both.

Transforming the Saks Fifth Avenue stores and e-commerce businesses into separate companies could be a prelude to spinning off the e-commerce operation into a public company. Saksfifthavenue.com generates about USD 1 billion in annual sales. That’s roughly twice the volume of the Mytheresa luxury website that went public in January and saw its stock price quickly soar.

HB said strategic investments will be made to “evolve and expand” the online experience, including strengthening service, styling capabilities and data-driven personalization. Saks e-commerce business will also feature “a hybrid retail and marketplace platform, expanding its assortment while maintaining a curated experience.”

Saks and SFA will work in conjunction to continue delivering a seamless customer experience. Returns, exchanges and SaksFirst credit cards will continue to be accepted both online and in stores.

Saks will lead marketing and merchandising across both businesses, while the stores will fulfil the physical functions of Saks, such as buy online, pick up in-store, exchanges, returns and alterations. Saks will retain ownership and control of the Saks Fifth Avenue intellectual property, including the brand and visual identity.

Larry Bruce has been appointed president of SFA and will report directly to HB’s chairman and CEO, Richard Baker. Bruce has been with Saks Fifth Avenue for nearly 20 years, including the past eight years as director of stores. Sebastian Gunningham will join the company’s board of directors and serve as an adviser. He was previously a member of the executive team at Amazon and led its marketplace expansion, among other large technology and operational divisions at the company. He has also held executive roles at Apple and Oracle, among other leadership roles.

Saks stores and ecommerce to become separate companies