Saks Fifth Avenue to convert retail space into office space

Saks Fifth Avenue's owner is teaming up with co-working firm WeWork to convert some of its retail space into office space as customers continue to do more of their shopping online.

The luxury department store will open the first SaksWorks space in September in the New York metro area, including its flagship store across from Rockefeller Center known for its elaborate Christmas displays.

According to a Wall Street Journal report, the companies will be planning a shared office space in Saks' original child's stock on the 10th floor of the building.

Another SaksWorks space will move into the closed men's store in lower Manhattan and others will open in stores in Manhasset on Long Island, Scarsdale on Greenwich, Conn. according to the report

The Pandemic has changed so much about our lives, including how we learned about it.

I'm thrilled to join SaksWorks in its efforts to serve the millions of Americans who now work remotely from their suburban homes or find themselves as part-time commuters in this hybrid world, SaksWorks President Amy Nelson said in a statement on Tuesday.

The move comes as the pandemic squeezes existing bricks and mortar retail businesses to suffer. Foot traffic has been down as consumers buy more online. The pain is especially acute for stores in non-residential areas that rely heavily on tourists and office workers, like midtown Manhattan where Saks flagship store is located.

Saks Fifth Avenue is owned by the Toronto-based Hudson's Bay Co. which owns most of its real estate holdings, including some buildings where it operated Lord Taylor department store brand that was sold a couple of years ago.

Some of the former Lord Taylor warehouses will be converted to WeWork run spaces, according to the report.

Most of the desks will be on wheels, so the layouts can change. The cost to workers will be $299 a month, according to the report.

WeWork will operate the spaces in return for a cut of revenue, but will not have to pay any rent, The Journal reports.

It is not the first time WeWork and HBC have worked together. They struck a deal in 2019 when WeWork purchased the Lord Taylor flagship building on Fifth Avenue for $850 million and discussed a plan to open office sharing areas in the 10 - story department store.

There is significant untapped potential for the proprietary workplace management technology that has powered what we operate, manage and sell our spaces with a member-focused mindset, WeWork CEO Sandeep Mathrani said in a statement. Today, with HBC, we take the first step to expand our technology platform.