Bricks and clicks are going to get different Fifth Avenue addresses now. (Photo by … [+]
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It is called an omnichannel. It is said to be platform-neutral. Call him wherever the buyer-wants-to-buy-it-we-sell-it. Whatever you call it, the integration of corporate sales with e-commerce has become the best practice in the industry over the last few years … especially as the disease spread on upside down retail sales.
That’s why the news from Hudson’s Bay Co. this morning that it will share its Saks Fifth Avenue stores and online units to two separate companies – confirming months of rumors – hard to understand. It can also be difficult to implement and undermine the long-term success of the luxury retail brand this makes this reason almost unbelievable.
HBC, which went private in 2020 after years of turnaround and change in its structure and strategy that led to poor financial performance, said it was spinning off its Saks e-commerce business into a stand-alone company with the canar Saks. In doing so, it sold a $ 500 million minority equity stake to private investor Insight Partners. HBC will maintain the balance of ownership of the unit amid the profitability of the business until it finally makes this entity public.
The 40-unit corporate side of the brand remains the operating unit of HBC, which also owns Hudson’s Bay retail operations in Canada. He was once a much larger corporate parent to brands including Lord & Taylor, Gilt.com, Home Outfitters and going back years, Fortunoff, not to mention a huge investment in the Kaufhof-based large German department store chain. They are all gone now because HBC has rested while struggling to make a profit. Apparently, it ended public awareness of performance.
It remains to be seen how individual Saks units will coordinate their work. Almost every other major sales company in North America has moved the other way, uniting the physical and digital aspects to better coordinate on the consumer front. HBC says it will work together to “create an unparalleled messenger experience.” According to reports, consumers will still see one Saks Fifth Avenue brand wherever they shop with the online side taking over marketing and merchandising and the physical stores that dominate online shopping, construction inbound, exchanges, returns and alterations.
On paper that might make sense but as they work together opens up issues that other vendors have tried to reduce by coming up with jobs. That’s why the driving force behind this decision seems to have a lot more of what should be two sides of the same coin as a product than a sale. The half-billion-dollar payday for HBC will have to help with the costs that come with taking it privately while creating a company that can take all the Wall Street grips of techy drama on- line, a story that has been playing out well for investors these days. .
In taking these steps it appears that Richard Baker, the CEO of the company that has been leading him through these upgrades and changes since he bought into the retail business is very unlikely. initially with its purchase of Lord & Taylor in 2006, again focusing on the return on investment and not the long-term strategy for running a retail business. Announcing the contract this week, he said so much that it would “unlock significant value within our company’s assets.”
After permanently locking the doors on so many selling brands, Baker’s success in unlocking nothing remains to be seen.