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Saks E-Commerce Unit Is Said to Seek IPO Valuation of $6B

The e-commerce business of Saks Fifth Avenue reportedly is planning an initial public offering that would value it at about $6 billion.
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The e-commerce business of luxury retailer Saks Fifth Avenue reportedly is planning an initial public offering that would value the company at about $6 billion.

The information came from The Wall Street Journal, which cited knowledgeable sources. 

In March, the e-commerce unit was split off into a separate company from Saks, which is owned by Hudson’s Bay Co. of Toronto. The unit was then valued at $2 billion.

The increased valuation would be possible thanks to surging sales since the pandemic lockdown eased.

Saks said the e-commerce business enjoyed an 82% surge in merchandise value, a sales metric, in the second quarter from the comparable prepandemic period of 2019, according to The Journal.

Saks is talking to potential underwriters this week, and an IPO could launch in the first half of next year, The Journal sources said.

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Activist investor Jana Partners indicated earlier this month that it wanted department-store chain Macy’s  (M) - Get Macy's Inc Report to separate its digital business from the brick-and-mortar stores.

Jana sent a letter to the Macy’s board after the investment firm acquired a position in the company. Jana projected the value of Macy’s online business at $14 billion.

Macy’s “e-commerce offering is a powerful combination and is moving us forward as a strong digitally led omnichannel business,” Jana said.

Macy’s on Monday closed 17.5% higher at $28.25. Morningstar analyst David Swartz puts fair value at exactly that level.

“We do not think Macy’s management will be amenable to Jana’s proposal and do not view it as realistic,” he wrote last week. 

“The idea of splitting its physical and online retail is contrary to Macy’s Polaris plan.”