HBC splits e-commerce, store businesses of Saks Fifth Avenue

HBC and private equity firm Insight Partners formed a partnership under which luxury retailer Saks Fifth Avenue LLC's e-commerce business will be separated from its stores unit and will be established as a stand-alone entity, to be known as Saks.

As part of the deal, Insight Partners made a $500 million minority equity investment in Saks, valuing the business at $2 billion.

The retailer's 40-store unit will operate as a separate entity called SFA, which will continue to be 100% owned by HBC.

Saks Fifth Avenue will continue to be the customer-facing name for both businesses. Saks will oversee marketing and merchandising across the two businesses and keep ownership and control of the Saks Fifth Avenue intellectual property, including the brand and visual identity.

Former Saks Fifth Avenue President and CEO Marc Metrick will be CEO and a board member of Saks. Metrick will be joined on the board by former Amazon.com Inc. executive Sebastian Gunningham, who will also serve as an adviser to the company.

Saks Fifth Avenue Director of Stores Larry Bruce will be the president of SFA.

HBC shareholder Rhone Capital LLC was actively involved in the deal.

Morgan Stanley & Co. LLC was HBC's placement agent for the transaction, while Ropes & Gray LLP and Stikeman Elliott LLP were legal advisers to the company.

District Capital Partners was financial adviser to Insight Partners, while Willkie Farr & Gallagher LLP was its legal adviser.