Saks Fifth Avenue Owner, WeWork Partner for Co-Working Spaces in Saks Stores
Hudson's Bay Co., owner of Saks Fifth Avenue, will convert parts of some department stores into co-working spaces, which will be managed by office-sharing startup WeWork, the companies said, at a time when many employees are negotiating remote work policies. Hudson's Bay will open its first five co-working offices, named SaksWorks, across the New York Tri-State area, including the Saks Fifth Avenue Flagship in Manhattan next month. The luxury retailer plans to launch more office spaces to target people who work remotely from the suburbs. The initial locations are set to open in September.
Total Retail's Take: This union brings together two parties that have seen better days. Saks has been challenged with store closures and less foot traffic during the pandemic, while WeWork has had to contend with an increasing work-from-home lifestyle that has negatively impacted its occupancy rates. The deal is a good one for Saks, as it's able to revitalize space that it's not currently using within its stores, offering additional sources of revenue for the department store chain, particularly important as more of its traditional business shifts online.
In announcing the new business, HBC said of SaksWorks that it "represents the next step in HBC's renowned track record of unlocking value across its real estate portfolio with its first foray into incubated ventures." HBC Executive Chairman Richard Baker noted that HBC is not a retailer but a "forward-thinking holding company at the intersection of technology, real estate and operating companies."