Saks Fifth Avenue will convert parts of its department stores into shared co-working spaces through a deal with WeWork, The Wall Street Journal reported.
Hudson Bay Co. (HBC) the owner of Saks, will open five co-working offices in the New York City area in September. The spaces, dubbed SaksWorks, will exist in current and former Saks stores, as well in property left behind from HBC’s Lord & Taylor brand, which filed for bankruptcy in 2020 and transitioned all of its business to e-commerce in April.
The partnership highlights an effort to capitalize on the rise in remote work amid a dip in foot traffic for brick-and-mortar retail. After a year without a formal office for most major companies, many plan to continue operating with a remote or hybrid work model moving forward. As such, the need for alternative work environments makes a WeWork model especially relevant.
“We think about, ‘What can we bring to the suburbs that we used to serve with retail concepts where our customers still live?’ ” SaksWorks president Amy Nelson told the WSJ. She added that there are plans to open more locations across Los Angeles, Seattle, Philadelphia and Boston metropolitan areas.
Watch on FN
To convert stores into office space, Nelson said she is adding plants and artwork as well as working with architects to bring more light into the space. WeWork will not have to pay rent to Hudson Bay Co. and will receive a revenue cut in return for staffing and managing the offices.
This move marks the latest event in a years-long relationship between HBC and WeWork. HBC sold its Lord & Taylor flagship department store in New York City to WeWork in 2017 for $850 million. The Fifth Avenue flagship was slated to be mostly converted into office space by 2019.
Others in the fashion industry have collaborated closely with the co-working company. In 2018, Rent the Runway partnered with WeWork to implement drop boxes in 15 office locations across the US.
WeWork is also negotiating a $150 million partnership with commercial real-estate firm Cushman & Wakefield PLC to focus on flexible workplaces.
HBC did not return a request for comment.
