Saks Fifth Avenue CEO Marc Metrick said on Friday that separating the luxury retailer’s e-commerce and brick-and-mortar businesses into two companies would allow it to attract more shoppers and serve them differently.
“It’s a new focus and it’s a new way to run the business, and the customers are really the biggest winners,” he said in an interview on CNBC.Closing bell. “
He said the spinoff freed up time for the brand to think beyond the store.
“A traditional department store has to consider ‘What is the business doing now? What does it do today?'” he said. “Instead of investing in your actual factories, you’re investing in marketing, investing in your customers’ futures. And that’s a much better way to grow your business in the long run. “
The parent company of the luxury department store, Hudson’s Bay Company, announced in the spring that it would appear on Sak .’s website into an independent business. Metrick is now the leader of that digital company. The move has put pressure on activist investors Macy’s and Kohl’s to perform the same actions.
Macy’s CEO Jeff Gennette said last month that the retailer hired consulting firm AlixPartners to review its business structure, after a boost from activist investor Jana Partners.
Kohl’s CEO, Michelle Gass, told CNBC’s Sara Eisen in an interview on Wednesday that it is reviewing the idea after receiving it a letter from the Engine Capital activist group urged the company to sell or spin off its e-commerce division.
However, some leading retail voices have questioned that approach or described it as a financial game to drive valuation rather than a winning business strategy.
Mickey Drexler, who has led some of the biggest names in retailers including Lot of holes and J. Crew, said in an interview on CNBC’s “Box of Squaw“this week Separating businesses creates rather than solving problems because the two sides are so intertwined.
“It doesn’t make sense to me,” he said. “That’s the simple answer.”
Metrick stopped short of saying the model would be a good one for other retailers.
“Right now, what I’m focusing on is that it’s the right thing to do for Saks,” he said. “That’s where we want to be with our consumers. That’s how we’re positioned. That’s how luxury is going to evolve in the future. And I haven’t really thought about the others. I just really focused on Saks.”
