Saks owner takes majority stake in flex office company Convene
Hudson’s Bay Company has made a multi-million bet that the future of in-person work environments lies in flex or coworking spaces.
The owner of Saks, Hudson’s Bay and other retail banners along with the real estate of former Lord & Taylor locations, has acquired a majority stake in co-working office provider Convene in partnership with private equity group Ares Management Corp. and Convene shareholders. The investment is valued at about $500 million, according to The Wall Street Journal.
As part of the deal, Convene will operate HBC’s three SaksWorks flexible work, event, restaurant and meeting spaces, which are located inside Saks stores and currently managed by WeWork. The spaces will be rebranded as Convene. (Convene currently manages 23 flex office facilities.). HBC will be the majority owner of the combined entity, with 26 facilities under management and dozens more under development. It is expected to be the largest premium flex space operator across the U.S., Canada and Europe.
“This strategic investment by HBC and Ares provides instant scale and growth opportunities for our business,” said Ryan Simonetti, co-founder and CEO of Convene. “We are excited to partner with HBC who is equally focused on delivering premium and flexible experiences to enable today’s distributed workforce.”
With the investment from HBC and Ares, Convene’s future expansion will focus on locations in key urban and suburban markets. Convene said it combines design, technology, and hospitality to deliver elevated meeting and event spaces that enable business productivity and collaboration. It offers a proprietary virtual and hybrid events platform that can be added to any Convene or third-party location venue to enable seamless, secure, hybrid, and virtual meetings for up to 10,000 virtual attendees.
“Ryan and his management team have a 12-year track record of building world-class destinations for hosting events, meetings, and flexible workspace,” said Hamid Hashemi, COO, 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. With this transaction, Convene will expand its footprint into suburban markets, where people can work and meet closer to home.”
HBC is the majority owner of Saks, an online destination for luxury fashion; The Bay, a Canadian e-commerce marketplace; and Saks Off 5th, a luxury off-price e-commerce. (The three businesses were established as separate operating companies in 2021.)
HBC also wholly owns Hudson’s Bay, the operating company for Hudson’s Bay’s brick-and-mortar stores, as well as SFA, the entity that operates Saks Fifth Avenue’s physical locations, and O5, the operating company for Saks Off 5th stores.
In addition, HBC owns or controls—either entirely or with joint venture partners—approximately 40 million square feet of gross leasable area. HBC Properties and Investments, the company’s real estate and investments portfolio business manages these assets along with additional real estate offerings, including Streetworks Development, its property development division.