What: CEO Marc Metrick discusses the rationale as well as nuts and bolts of reengineering Saks Fifth Avenue into separate e-commerce and brick-and-mortar companies.

Why is it important: Metrick’s message is that saks.com can get bigger and more profitable faster and serve a larger audience now as a stand-alone company with new financing.

Some insiders saw the split as overly complicated, involving a great deal of administrative detail, and a sign that HBC saw a big future in the dot-com side of the business while diminishing expectations for the stores. Within the industry, there’s been a difference of opinion as to whether the reengineering would benefit the Saks Fifth Avenue brand overall, lead to better experiences for shoppers and position saks.com for an initial public offering, which is a real possibility.

Metrick suggested that orchestrating the split wasn’t as complicated as others have imagined. Hudson’s Bay Co. had already decentralised its shared services structure, enabling its divisions to operate more independently. Metrick said more than 300 agreements were established between the two companies, that saks.com charges fees for the services it provides to SFA, and vice versa, and that the intellectual property is owned by saks.com.

Saks.com’s chief merchandising officer Tracy Margolies handle all the buying and merchandising for saks.com and Saks Fifth Avenue stores. Merchandise planning and allocation for the stores is done by saks.com.Emily Essner, chief marketing officer of saks.com, is in charge all the pricing, promotion and brand image for saks.com and the Saks Fifth Avenue stores. Meanwhile, because SFA is handling such functions and services as buy online, pick up in stores, returns, exchanges and alterations, SFA charges saks.com fees through the operating service agreements. The marketing team at saks.com handles communications to all customers, though style advisers in the stores still engage and communicate directly with their customers.

Customer service doesn’t change. If it’s needed in store, the store team handles it. When customers need support with their online order or experience, they contact the saks.com call centre. Metrick explained how sales associates are compensated. He said if a customer shops at a SFA store and gets helped by a store associate, but makes the purchase online, saks.com gets credit for the transaction. If a customer shops online and gets assisted by an online stylist at saks.com, but then goes to a SFA store to try it on and purchases it there, SFA gets credit for the sale and the store associate gets the commission.

Saks Fifth Avenue’s Playbook on a Split Up