Discounted luxury retailer Saks Off 5th will split its brick-and-mortar stores from its e-commerce business in a deal that values its digital enterprise as a $1 billion stand-alone entity, the company announced.
Venture capital firm Insight Partners led a $200 million equity investment in Saks Off 5th’s e-commerce business, while Saks Off 5th’s 105 store locations across the U.S. will remain separate and owned by parent company HBC, the company announced Monday.
The move to separate the discounted designer retailer’s digital business from brick-and-mortar comes after Saks Fifth Avenue brokered the same deal with its stores and online business, according to the New York Post.
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“With a unique market position and on the heels of explosive growth, we are excited to establish Saks OFF 5TH as the preeminent digitally native luxury off-price retailer,” HBC’s Governor, Executive Chairman and CEO Richard Baker said in a statement.
“Saks OFF 5TH has a significant opportunity to capture additional market share by further expanding its digital capabilities.”
Discounted retailers have ramped up e-commerce during the coronavirus pandemic, as more consumers shopped online at home. TJ Maxx announced last year it was rolling out e-commerce for affordable home furnishings store Home Goods, and discounted luxury department story Century 21 said earlier this year it was relaunching stores after going bankrupt in 2020.