WeWork’s Bid to Save Retail — and Itself
Is the collaboration with Saks the future of the retail sector?
$299: That’s the monthly membership fee to join SaksWorks, the collaboration between Saks Fifth Avenue and WeWork aiming to solve the issue of empty retail space.
WeWork has endured one hell of a rollercoaster in the past few years. From its meteoric rise and subsequent spectacular fall, the company has somehow lived to tell the tale. Not only having to rebuild its brand and reputation, the company had to contend with a global pandemic that shuttered businesses and moved the workforce into their homes — a bad position for a real estate business to be in. (Yes, real estate company, not a tech company. No one buys that anymore, right?) At one point, occupancy at WeWork buildings had plunged 30%, and losses quadrupled to $2.1 billion. The company had to dig deep while the shelter-from-home orders remained in place. But it could have been worse. Other sectors such as retail have been impacted much harder. In 2021 alone, there has been a record 12,200 closures, and many more will follow. Ironically, despite being a major factor in the turbulence in these sectors, the pandemic may also provide a lifeline to both. The impact is forcing a rethink on how to use retail space — especially the empty ones — and the increased uptake in hybrid work is opening the door for WeWork to regain some of its former glory.
Announced on August 10, the collaboration between Saks Fifth Avenue and WeWork, SaksWorks, will open at five New York tristate area locations next month, including one at the Saks flagship on Fifth Avenue. The offices will occupy departments of the stores that have been shuttered or are performing poorly. As well as the trendy, flexible furnishings expected at a WeWork location, the spaces will also house gym facilities and a cafe and be available to members for a monthly fee of $299. The project is targeting suburban workers who are working remotely either part or full time, who like the appeal of hybrid working. Speaking to The Wall Street Journal, SaksWorks President Amy Nelson announced the project’s mission, “What can we bring to the suburbs that we used to serve with retail concepts where our customers still live?”