- Saks Fifth Avenue parent HBC is teaming up with WeWork to launch coworking spaces under a new business dubbed "SaksWorks."
- The launch of the new coworking venture spans five spots in the New York area, including the Saks Fifth Avenue New York flagship, according to a press release. The initial locations are set to open in September.
- WeWork is managing the spaces while HBC hired Amy Nelson, an entrepreneur who previously opened coworking spaces for working women, to lead SaksWorks as president.
Over the past several years HBC has gone through a process of disassembling and reassembling that has accelerated in recent months.
Amid the department store doldrums, it has sold off assets including prized real estate and, in 2019, the then-oldest department store chain in the U.S., Lord & Taylor, which ultimately liquidated in bankruptcy. More recently, HBC has gone private and spun off the e-commerce units tied to Saks and the off-price Saks Off 5th into separate companies co-owned by private equity and other investors, including an NBA star.
SaksWorks is yet another fold in HBC's business holdings and a new way to make money from its retail real estate that does not involve the retailing of goods in department stores, which the company has done for more than a century.
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." In the words of HBC Executive Chairman Richard Baker, HBC is not a retailer but a "forward-thinking holding company at the intersection of technology, real estate and operating companies."
The coworking venture ties the luxury brand space to coworking spaces aimed at urban and suburban areas, bringing upscale amenities including "stylish work and meeting spaces, artisanal cafes with fresh food and beverages, restaurant space, retail, fitness studios and programmed events for members," HBC said in the release.
The venture is also part of a transition for the coworking specialist WeWork. That company has had a tough couple of years after concerns about a money-burning business model and conflicts of interest pushed it to scrap an initial public offering. Shortly before the canceled IPO, the company parted with its founder-CEO Adam Neumann, who left under a cloud when disclosures and media reports uncovered the myriad ways Neumann profited from WeWork personally and led a troubling corporate culture. Next came the pandemic, which ushered in a work-from-home era and hit right at the heart of the co-working sector.
With SaksWorks, WeWork is managing on behalf of a landlord and bringing its member network to bear, rather than taking on the risk of leasing itself. "Today, with HBC, we take the first step toward expanding our technology platform product offering and providing a differentiated approach to how landlords can incorporate flexible space across their portfolio," said current WeWork CEO Sandeep Mathrani in a press release. "In SaksWorks, we found a partner equally dedicated to unparalleled member experiences and are eager to launch a best-in-class product together."
The partnership could herald other working team-ups and ventures throughout retail. The industry has flirted with coworking for several years, as a way to monetize retail space and create an ecosystem around stores with a captive audience. In the past, WeWork has partnered with Rent the Runway and J. Crew.