Saks terminates e-commerce alliance with Amazon after bankruptcy filing
What's the story
Saks Global is terminating its "Saks on Amazon" partnership with the e-commerce giant Amazon. The decision comes after the company filed for bankruptcy earlier this month. According to Reuters, Saks will be closing its Saks on Amazon storefront to focus on areas of its business that it believes can drive more growth.
Business strategy
Limited brand participation on Amazon
As per the report, Saks on Amazon storefront witnessed limited brand participation. Now, Saks wants to drive more traffic to its own website, Saks.com. This decision comes after Amazon's $475 million investment in Saks's business in 2024 and an eight-year agreement where Saks would sell products on Amazon for at least $900 million.
Partnership challenges
Legal disputes and brand pushback
The partnership has been marred by legal disputes over store assets and pushback from luxury brands. These brands were concerned that selling on a mass-market platform like Amazon would hurt their image. This development highlights the challenges of balancing e-commerce partnerships with brand reputation management in the luxury goods sector.
E-commerce evolution
Amazon's response to Saks's decision
In response to Saks's decision, an Amazon spokesperson said that the company's luxury store still has a wide range of high-end designer styles. The spokesperson also added that they are regularly adding more luxury brands. This statement shows Amazon's commitment to continue expanding its offerings in the luxury goods space despite challenges with individual partnerships like the one with Saks Global.