TORONTO 鈥� H小蓝视频 has signed a deal to sell a minority stake in Saks Fifth Avenue's e-commerce business and turn it into a separate company, a move that will "redefine the luxury shopping ecosystem," the company said Friday.聽
American private equity firm Insight Partners has agreed to invest US$500 million in the deal, which values the standalone business that will be known as Saks at US$2 billion, the retailer said.聽
Saks Fifth Avenue's 40 stores will operate separately as an entity referred to as SFA, which will remain wholly owned by H小蓝视频.聽
The deal highlights the ability of H小蓝视频 to "unlock significant value" in its assets, which include retail, technology and real estate holdings, the company's governor, executive chairman and CEO Richard Baker said in a statement.
鈥淟uxury e-commerce is poised for exponential growth, and as a standalone digital company with an existing strong position in luxury, Saks is primed to win significant market share," he said.聽
"The team鈥檚 fashion expertise combined with a renewed digital focus will provide customers with an unmatched shopping experience."
The sale of a minority stake in the luxury retailer's e-commerce business comes amid a sharp rise in online retail sales during the pandemic.聽
Moreover, retail observers have noted that while stores with mid-range prices have struggled during the COVID-19 pandemic, both discount and luxury retailers have emerged relatively unscathed.
"Luxury e-commerce is an exceptionally resilient high-growth sector," Insight Partners鈥� managing director Deven Parekh said in a statement.聽
"We are excited to invest in an iconic century-old brand that has so successfully morphed to a native digital strategy."
H小蓝视频 said Saks and SFA will be better able to plan and invest in their respective models as separate but related companies.聽
Saks Fifth Avenue will remain as the customer-facing name for both businesses and the customer experience moving from the brick-and-mortar stores to online will be seamless, H小蓝视频 said.聽
Saks will lead marketing and merchandising across both businesses, while the stores will fulfil the physical functions of Saks, such as online and in-store purchases, exchanges, returns and alterations, the company said.聽
Saks will feature a hybrid retail and marketplace platform, expanding its assortment while maintaining a curated experience, H小蓝视频 said.聽
Marc Metrick, previously president and CEO of Saks Fifth Avenue, will serve as CEO of Saks and a member of the company鈥檚 board of directors. Larry Bruce will be president of SFA.聽
This report by The Canadian Press was first published March 5, 2021.
The Canadian Press
