Saks secures financing for new growth strategy as standalone online business
Following its launch as a separate entity earlier this year, luxury e-commerce company Saks.com LLC (Saks) has announced that it has closed deals securing the business $465 million in new financing.
The financing comes via a syndicated $350 million asset-based five-year revolving credit facility arranged by Bank of America, N.A., and a $115 million senior secured term loan arranged by Pathlight Capital LP.
According to Saks, the asset-based revolving credit facility, which was undrawn at closing, will remain available for the company to use for “general corporate purposes or growth initiatives.”
Part of the funds from the term loan will be used to pay off some of the company’s obligations to HBC, while the remainder will be available for Saks to use for other projects.
“Given our strong market position and the improving economic environment, Saks is poised to lead in luxury ecommerce. These transactions and their favorable terms are a reflection of the strength of our business and capital position,” said Saks CFO Vince Phelan in a release.
“Furthermore, this financing combined with cash we already have on hand ensures we have substantial liquidity and flexibility to execute on our strategic plans and build on the upward trajectory we are already seeing in our business,” added Phelan.
Formerly operating as the online business of HBC-owned luxury department store retailer Saks Fifth Avenue, Saks was launched as a separate entity this year, following a $500 million investment from private equity firm Insight Partners.
The division of Saks and Saks Fifth Avenue, which now function as “separate but related sister companies,” seeks to allow the digital business to pursue its own path as a focused luxury e-commerce platform, able to make strategic investments to develop and expand its online experience.
Luxury e-commerce saw solid growth during the Covid-19 pandemic, as brick-and-mortar stores suffered from temporary closures and reduced traffic. This growth in the channel has led many companies in the luxury industry to double down on their digital investments and explore a variety of strategies for expanding their online operations.
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