Saks Fifth Avenue plotting a possible spinoff of Saks.com
Saks Fifth Avenue is looking to spin off its dot-com business in a potential initial public offering within a year.
The luxury retailer owned by Toronto-based Hudson’s Bay Co. left the Toronto Stock Exchange in March to become a privately held company, but management has prepared materials for investors to consider in preparation for an IPO for Saks.com, sources told The Post.
Nevertheless, it’s “early days,” according to a source with with knowledge of the effort.
The move would split the 40 Saks Fifth Avenue stores from its $1 billion digital business, but an exclusive agreement would keep them tethered to each other, according to Women’s Wear Daily, which first reported the IPO plans.
HBC executive chairman Richard Baker, who owns a majority stake in the company, has talked about a spinoff of Saks.com since 2017, according to sources familiar with his thinking.
HBC also owns 106 Saks Off Fifth stores.
During the pandemic online shopping has become critically important for retailers as many shoppers avoid brick and mortar stores and sales at Saks.com have increased by “double digits.”
“Saks.com significant value,” said retail consultant Gerald Storch, who is a former CEO of HBC. “But pulling off such an IPO is quite difficult and unprecedented.”
Among the challenges HBC would face, Storch said, is providing incentives “for the sales staff to treat sales at the stores and the Internet the same,” and determining the commission pricing on those sales.
Saks Fifth Avenue chief executive Marc Metrick would be the likely candidate to run the public entity, the sources said.
HBC declined to comment.