Saks.com Cutting Staff
● The luxury website staffed up after it received a $500 million investment in 2021 and now is managing costs.
Saks.com is cutting its workforce and expected to reveal the layoffs this week, WWD has learned.
Sources said at least 100 people would be given pink slips, though it's a small percentage of the entire Saks. com workforce of about 2,000 workers, including 1,000 at the corporate headquarters in New York. It was not clear whether further cuts could occur later in the year.
“As a matter of company policy, we don't comment on rumor or speculation,” a spokeswoman told WWD.
Unlike the tech and financial sectors, layoffs have yet to hit the retail sector, though with holiday 2022 sales ending up less than expected for many retailers, cutbacks could soon be seen.
In the case of Saks.com, the layoffs appear to be a response to the significant buildup in technology, staff and assortments that's occurred since Saks. com became a separate company in 2021. In addition, the rate of digital sales growth industry-wide has been slowing with more consumers gravitating back to shopping brick-and-mortar stores since last year.
“Saks.com may be looking to manage costs more in line with sales expectations,” one source said.
It is believed that the Saks.com headcount doubled, more or less, since Insight Partners, a venture capital and private equity firm, made a $500 million minority equity investment in the Saks e-commerce business, valuing it at $2 billion in 2021, simultaneous with the reengineering of Saks Fifth Avenue by its parent, HBC, with a new business model, splitting the Saks Fifth Avenue store fleet and Saks.com into separate companies.
In May 2021, Saks.com secured the $115 million senior secured term loan arranged by Pathlight, as part of a round of financial transactions meant to strengthen its liquidity and potential to grow. At the same time, Saks.com closed on the syndicated $350 million, asset-based fiveyear revolving credit facility arranged by Bank of America.