The move splits the American department store chain’s network of 40 stores from its online sales channel in an effort to better position Saks.com to compete with digital competitors like Farfetch, Net-a-Porter and Mytheresa. The newly stand-alone business has received a cash injection of $500 million from venture capital firm Insight Partners and will add a marketplace to offer more products, owner Hudson’s Bay Company said Friday. 

Saks.com currently generates about $1 billion in annual sales. Insight Partners has acquired a minority stake through its investment, valuing the business at $2 billion. The web business will own the rights to the Saks Fifth Avenue name and branding and be responsible for marketing and merchandising for both the online and store channels.

Saks Fifth Avenue’s chief executive Marc Metrick will lead Saks.com, retaining his current title. Saks’ director of stores, Larry Bruce, has been named president of the store business, reporting to Hudson’s Bay chief executive officer Richard Baker. Additionally, former Amazon executive Sebastian Gunningham will join the board of the e-commerce business to advise on its marketplace expansion.

Hudson’s Bay Co. went private in 2019 as its department store portfolio struggled, and the company explored other options to try to raise additional capital in 2020 after store closures weakened its balance sheet.