More Than a Year After Being Spun Off, Saks.com Raises More Capital to ‘Support Future Growth Initiatives’
Saks.com has raised more money as it seeks to grow its e-commerce business.
On Wednesday, the retailer announced it had “upsized” its existing asset-based revolving credit facility arranged by Bank of America N.A., increasing borrowing capacity from $350 million to $450 million.
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At the same time, Saks.com also “upsized” its senior secured term loan facility, of which Pathlight Capital LP serves as the administrative agent, increasing borrowings from $115 million to $175 million. There were no changes to the maturity date of either facility, which are both due in 2026.
In a statement, Saks.com said that the upsized asset-based revolving credit facility will continue to help fund the company’s working capital needs and will be used for general corporate purposes.
Vince Phelan, CFO of Saks, added that the additional capital provided under these facilities significantly enhances the company’s “financial flexibility” and ability to “support future growth initiatives.”
“We believe that securing this additional financing reflects confidence in our strong foundation and positive momentum as we position Saks to lead in luxury e-commerce,” Phelan said in a statement. “We are pleased to further strengthen our relationships with Bank of America, Pathlight and the entire syndicate, and thank them for supporting our business.”
In March 2021, Saks Fifth Avenue’s parent company, Hudson’s Bay Co., split the retailer’s website into a separate business from its stores following a $500 million infusion from a venture capital firm.
“Luxury e-commerce is poised for exponential growth, and as a standalone digital company with an existing strong position in luxury, Saks is primed to win significant market share,” HBC governor, executive chairman and CEO Richard Baker said in a statement at the time of the spinoff. “With this move, we are redefining the luxury shopping ecosystem, supercharged by an enviable customer base, incomparable brand equity, long-standing relationships with top designers and exquisite stores in top markets across North America.”
In late January 2021, a report from FN’s sister publication WWD suggested that the spinoff could bring a Saks.com IPO to further capitalize on the company’s unconfirmed earnings of about $2 billion in annual sales.
The success of this spinoff led the company to separate its off-price banner, Saks Off 5th, into individual dot-com and brick-and-mortar businesses in June 2021.
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