Saks Fifth Avenue, WeWork teaming up to open office space in luxury stores

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

The luxury department store will open the first SaksWorks spaces 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 setting up a shared office space in Saks’ former children’s store on the 10th floor of the building.

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

"The pandemic has changed so much about our lives, including how we
work and where we live. I’m thrilled to join SaksWorks in its efforts to serve the millions of Americans who now work remotely from their suburban homes or who 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 the already suffering business of bricks-and-mortar retail. Foot traffic has been down as consumers buy more things 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.

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

Some of the former Lord & Taylor stores will be converted to WeWork managed 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 won’t have to pay any rent, The Journal reports.

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

"There is significant untapped potential for third-party usage of WeWork’s proprietary workplace management technology, which, for a decade, has powered how 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 toward expanding our technology platform." 

To read more from the New York Post, click here.