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WSJ: Saks Fifth Avenue Pursuing IPO for its Digital Operations

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Saks Fifth Avenue is reportedly aiming to go public in the first half of 2022 with a targeted valuation of approximately $6 billion, people familiar with the matter told The Wall Street Journal. Saks was last valued at $2 billion in March 2021 when the company split off its ecommerce business from the brick-and-mortar operations, now called SFA.

Venture capital firm Insight Partners took a minority stake following the split, when Saks’ sales annual sales were $1 billion. The digital retailer has since stated that it experienced 82% growth between Q2 2019 and Q2 2021. Additionally, parent company HBC has spun off the ecommerce operations of Saks OFF 5TH into its own independent entity, while the physical side of the business became a wholly-owned company named O5. The company received a $200 million equity investment in a round led by Insight Partners.

Saks’ IPO plans are reportedly what prompted Jana Partners to take a stake in Macy’s and push for the department store to spin off its own ecommerce operations. Jana Partners believes Macy’s could be worth as much as $14 billion as an ecommerce pure play, compared to its current market value of about $6.9 billion.

Retail IPOs have been hot throughout 2021 as the industry posted a strong post-lockdown recovery. Petco kicked off the parade, debuting at $6.4 billion in January, and Allbirds, Authentic Brands Group, Claire’s and Rent the Runway are just a selection of other retailers that have indicated their plans to go public.

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The Wall Street Journal noted that there is no guarantee that Saks will move forward with its IPO plans, as market conditions and other factors could influence its decision.

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