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Highlights
- New York-based Saks Fifth Avenue is reportedly looking to go public.
- Potential investors could be interested in the Saks Fifth Avenue IPO as the company is a premier destination for luxury fashion.
- The e-commerce arm of Saks Fifth Avenue experienced a surge in sales and helped the company to stay in business amid the COVID-19 pandemic.
Saks Fifth Avenue, the New York-based luxury brand retailer's e-commerce arm is reportedly planning for a public debut at an estimated valuation of US$ 6 billion.
Hudson's Bay Company, the parent company of Saks Fifth Avenue, took the latter private in 2020 at an entire company valuation of US$ 1.5 billion. Last year, Hudson's Bay Company had reportedly divided the e-commerce unit of the luxury brand by selling a minority share to Insight Partners to reach a total valuation of US$ 2 billion.
The separation from the physical stores and e-commerce arm of Saks Fifth Avenue was reportedly meant to be seamless for customers and it was done for financial reasons only. Notably, the branding has remained the same on the online and offline networks of Saks' stores.
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The COVID-19 pandemic boosted e-commerce sales across sectors as people stayed indoors and followed public health guidelines. Saks Fifth Avenue's online arm also experienced a surge in sales and helped the company to stay in business amid the public health crisis.
Why Saks Fifth Avenue’s e-commerce arm may go public?
Most of the world has adapted to a shop-from-home practice amid the ongoing pandemic, and this could continue even as the world reopens. Saks Fifth Avenue could use the gross proceeds raised in the initial public offering to expand its e-commerce business.
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The company is expected to go public by the first half of 2022 and is reportedly in touch with a range of bankers for taking the underwriting responsibility. However, it is important to note that initiating talks with banks for an IPO is one of the first steps and there is no guarantee that anything will move forward.
Bottom line
Potential investors interested in the stock of the premier destination for luxury fashion products will have to wait for the official IPO plans of the company.
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Once the Securities and Exchange Commission (SEC) approves the documents filed for an IPO, the company generally offers a chance of buying the pre-IPO stock to retail investors through a lottery basis.
