A survival strategy for British retailers

American shops are splitting off their web divisions – that could release value for British retailers too, says Matthew Lynn.

Macy's department store
Will British retailers follow Macy’s lead?
(Image credit: © Christopher Occhicone/Bloomberg via Getty Images)

For the last 20 years just about every major retail chain has had a web presence of some sort. They have met with varying degrees of success. Some are full-scale e-commerce sites that have their own customers, brand and presence. Others are click-and-collect options for customers who don’t want to spend time browsing in the actual shop. Others are more like extended advertisements: you can see what the shop has to offer before heading off to a branch.

Now a few are starting to see those websites as separate units. US department store Saks started the trend in March this year when it announced that it planned to separate out its department stores and its web unit. In the spring Saks online was expected to be worth about $2bn. That has already tripled to closer to $6bn and it might be even more by the time the unit is floated early next year. Rival Macy’s is now expected to follow with a break-up of its own that could double the value of the business to $14bn. Over in the Netherlands, Ahold has decided to break out its Bol unit, again with a big potential uplift in value for shareholders. Many others might well decide to follow suit.

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Matthew Lynn

Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years. 

He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.