Saks Fifth Avenue (SFA) has announced the launch of its new digitally native business, the Saks OFF 5TH. The e-commerce platform will expand the company’s assortment and keep the shopping experience curated. Payge Thomas has been appointed President and CEO of the new business, while Sebastian Gunningham has joined the company’s board of directors.
Payge Thomas has been appointed President and CEO of the new digitally native Saks OFF 5TH business
Saks OFF 5TH, the online luxury off-price brand that launched in March of 2021, is establishing itself as a separate operating company. HBC, the company that owns Saks Fifth Avenue, will also own the brand’s 40 stores. This is a major move that will bring the company a $200 million equity investment.
The move will result in a significant overhaul of the banner’s buying strategies and service strategies. These changes are expected to help the company achieve positive comparable sales in three of the last four quarters.
Saks OFF 5TH is a premier luxury off-price e-commerce company that offers top brands at affordable prices. In March of this year, the company announced a $200 million equity investment. Its online business will be valued at $1bn.
Sebastian Gunningham joins the company’s board of directors
It may ome as no surprise that ecommerce has become a big part of the business for luxury retailers. While a number of big box brands have opted to forego the online marketplace, the industry is not without its own online shops. Those include Saks OFF 5TH, a leading off-price retailer, and Mytheresa, an upscale online purveyor that was acquired by HBC rival Neiman Marcus Group in 2014.
The company’s new parent HBC partnered with a private equity firm called Insight Partners to infuse the ecommerce division with $500 million. The company is also home to the largest department store chain in Canada, Hudson’s Bay, and has an impressive portfolio of portfolio companies in top markets.
HBC was taken private for close to two billion dollars last year. After the sale, the ecommerce department will operate as a wholly owned subsidiary under the Saks Fifth Avenue name.
The e-commerce platform expands assortment while maintaining a curated experience
It’s no secret that expanding your product assortment can be a daunting task. Even for brands with a hefty R&D budget, it’s not always easy to create new offerings, while maintaining existing inventory. To that end, HBC recently announced its nascent ecommerce initiative. In turn, Target2Sell, an ecommerce personalization vendor, has thrown its hat into the ring. With the help of AI and an army of data scientists, the aforementioned company has developed a nifty toolkit for sifting through millions of products to find the best fits for buyers.
Target2Sell’s product suite also includes an impressive number of other nifty items. The aforementioned entrant’s product portfolio contains the aforementioned best of breed solutions ranging from product cataloging to customer engagement to marketing, all of which are designed to help retailers achieve their goals and keep the consumers happy.
The brick-and-mortar Saks OFF 5TH stores will operate separately as an entity referred to as SFA
Saks Fifth Avenue, an American luxury retailer, is about to be split into two separate entities: a brick-and-mortar and an e-commerce operation. The two entities will be linked through a franchise-like relationship, with each business focusing on different areas, such as marketing, merchandising, and data-driven personalization.
HBC, the company that owns Saks, has partnered with private equity firm Insight Partners in order to make strategic investments in the business. This includes a $500 million investment, which is a minority stake in the company.
Marc Metrick will take on the role of CEO of Saks Fifth Avenue. Sebastian Gunningham, former Amazon executive, will also join the board of directors. He is one of the leaders of the company’s online marketplace expansion.
As part of the deal, Saks will retain its brand and visual identity. However, the e-commerce business will be known as “Saks,” while the brick-and-mortar stores will be referred to as Saks OFF 5TH (SFA).
Saks OFF 5TH will receive $200 million from investors. Meanwhile, the company’s 40 store locations will remain wholly owned by HBC.
The e-commerce business will be known as Saks
Saks, a luxury retailer, and HBC, the owner of the Canadian department store chain, have partnered to create a new digital company. The two businesses will operate as sister companies. The newly formed digital company will be called Saks.
Marc Metrick, the former CEO of Saks Fifth Avenue, will lead the new business. He will also serve as a member of the Saks board of directors. In addition, former Amazon executive Sebastian Gunningham will join the e-commerce company’s board.
As part of the deal, HBC will sell its minority stake in Saks Fifth Avenue’s e-commerce business. This will allow the e-commerce division to move into its own separate company. At the same time, HBC will be able to unlock significant value in its assets.