Saks Fifth Avenue owner Hudson’s Bay Company (HBC) is betting big on the flexible workplace.
The Canadian retailer has made a strategic investment in flex coworking and event space provider Convene in partnership with private equity group of Ares Management Corporation on Tuesday. Terms of the deal were not disclosed, but The Wall Street Journal reported the deal was valued at around $500 million, with HBC taking a majority stake in the company.
As part of the deal, all of HBC’s existing and future SaksWorks locations will combine with Convene, with 26 facilities under management and dozens more under development. This deal is expected to make Convene the largest premium flex space operator across the U.S., Canada and Europe, according to the company.
HBC said on Tuesday that SaksWorks locations will remain branded as such in the interim, but will eventually rebrand under the Convene moniker. HBC also said that this transaction will allow Convene to expand its footprint into suburban markets, where some SaksWorks are currently located.
“This strategic investment by HBC and Ares provides instant scale and growth opportunities for our business,” Ryan Simonetti, co-founder and CEO of Convene said in a statement. “We are excited to partner with HBC who is equally focused on delivering premium and flexible experiences to enable today’s distributed workforce. As organizations continue to embrace hybrid work and are demanding higher quality environments in which to gather, we are well-positioned to seize this moment.”
“Ryan and his management team have a 12-year track record of building world-class destinations for hosting events, meetings, and flexible workspace,” added Hamid Hashemi, COO of HBC Properties & Investments. “We are looking forward to implementing our shared vision across parts of HBC’s real estate portfolio, including the conversion of certain of its assets into Convene locations.”
This news comes less than a year after HBC started to partially convert some of its Saks Fifth Avenue stores into office spaces in partnership with WeWork. In September, HBC opened five co-working offices in the New York area. The spaces, dubbed SaksWorks, 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 2021.
FN has reached out to HBC for further comment on the deal, and the future of its partnership with prior partner, WeWork.