June 21 (Reuters) - Hudson’s Bay Co said on Monday it had raised $200 million to establish the e-commerce unit of its off-price business, Saks Off 5th, as a standalone entity, as the luxury retailer seeks to woo more shoppers online.
Like many retailers, Hudson’s Bay has been trying to recover from the impact of the COVID-19 pandemic by bolstering its digital business as well as forming new partnerships, including one with fast-fashion brand Forever 21.
The Saks Fifth Avenue owner said the funding round, led by Insight Partners, values the e-commerce unit at about $1 billion. The private equity firm in March had pumped $500 million to launch the department store’s online segment, Saks, as a separate business.
Saks Off 5th’s store fleet, consisting of 105 locations across the United States and Canada, will be a separate entity, referred to as O5, and remain wholly owned by Hudson’s Bay.
Several American legacy retailers including Nordstrom Inc and Macy’s Inc have grown their off-price outlets, once seen as a bargain bin for unsold merchandise, into standalone retail operations to compete with discounters such as TJX Companies Inc. (Reporting by Nivedita Balu in Bengaluru; Editing by Ramakrishnan M.)