Saks is turning its back on department stores

Saks Fifth Avenue made its name as one of the world’s glitziest department stores. Now its owner, Hudson’s Bay Company (HBC), is admitting that stores are not where the business’s future value lies.

HBC is splitting Saks’s e-commerce business into a separate company and has sold a minority stake to venture-capital firm Insight Partners for $500 million. The deal values the new standalone business, to be known simply as Saks, at $2 billion, HBC said in an announcement today.

Saks currently operates 40 department stores and 110 outlet locations, according to HBC. Customers aren’t expected to see any noticeable changes in their shopping experience, the Wall Street Journal reported, and will still be able to return items to stores that they bought online.

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