The eCommerce spinoff of Saks Fifth Avenue — Saks — is reportedly pondering a public offering in the first six months of next year that could give it an estimated valuation of $6 billion, the Wall Street Journal (WSJ) reported, citing unnamed sources.
Saks is reportedly in talks with several bankers to serve as possible underwriters for an initial public offering (IPO), the sources said, adding that although sit-downs with bankers are typically the first steps in going public, there is no guarantee yet that anything will move forward.
Plans for an IPO align with the next steps of a deal struck earlier this year that moved to split Saks’ retail brick-and-mortar locations from its digital commerce, which had about $1 billion in annual sales.
The parent company of Saks, HBC, went private last year at a whole-company valuation of $1.5 billion. The company then divided the luxury eCommerce unit, selling a minority share at a value of $2 billion to Insight Partners, according to WSJ.
For customers, the separation of Saks eCommerce from physical locations was meant to be seamless and frictionless, per the report. The company indicated that it went in the direction it did for financial reasons only and the branding has remained the same across online and offline channels. The two divisions split many duties such as marketing, merch, and affiliate fees.
Covid-19 fueled the surge in eCommerce sales at Saks Fifth Avenue, just like at most stores that quickly pivoted to stay in business amid unprecedented times. Many of the stay-at-home habits adopted during the pandemic are carrying over as the world reopens and more people become vaccinated.