Long a united front, bricks and clicks may be heading for divorce in a move that’s leaving some retail analysts scratching their heads.

Amid a flurry of retail IPOs and funding rounds last year, activist investors are pushing some department stores to reconsider their omnichannel strategies and make the largely unprecedented choice to spin off their online businesses from physical stores.

Saks Fifth Avenue owner HBC led the charge last March, unveiling its deal to separate the luxury retailer’s e-comm site and call it Saks, with its stores known as SFA. Venture capital firm Insight Partners took a $500 million minority stake in Saks at a $2 billion valuation, and it’s now reportedly prepping for an IPO set for this year at triple that.

• Activist investor groups have since taken note: Jana Partners is urging Macy’s to split off its digital biz after taking a stake in the retailer in October, while Engine Capital made it known in December that it wants Kohl’s to do the same.

Wait, why? The financial motivations are clear. With spun-off e-comm sites, investors are looking to “unlock value” online and boost valuations much higher than brick-and-mortar retailers typically trade, Roxanne Meyer, director of equity research and retail and e-commerce analyst at MKM Partners, told Retail Brew.

But many think the move doesn’t serve a retailer’s—or customer’s—best interests.

A hard sell

Meyer noted that the most successful companies have made the e-commerce and in-store experiences “seamless.” With the two potentially at odds, things could get a little messy. And even thwart sales.

As the distinctions between channels have “evaporated” over time, consumers have become agnostic, explained Steve Dennis, a former retail exec and founder of SageBerry Consulting. Purchases starting in one channel are often being completed in another. (Think about the number of times you’ve second-guessed something in a store, only to add it to your online shopping cart the next day.)

• “[It] sets retailers back like 20 years to think about e-commerce and physical retail as separate things,” he said.

“I have a hard time believing that many of these companies believe it’s the right move fundamentally,” Meyer added. “But if it’s what drives value for shareholders, that doesn’t mean they’ll make the right decision on fundamentals.”

Click here for a quick history lesson on spin-offs—and what will determine if the strategy will stick.—EC

Have you already caved on your New Year’s resolutions? Sweetgreen hopes not: The salad chain is piloting a new subscription service for its most loyal customers.

Sweetpass, as it’s called, is available through January 16 and costs $10.

• It gives customers a $3 credit on certain orders and can be used once a day, valid for 30 days.

Like, comment, subscribe: A subscription service, as CNBC notes, could bring new customers into the fold, as well as increase loyalty among existing diners, a strategy QSRs like Taco Bell and Panera have also employed.

Daniel Shlossman, senior vice president of digital and growth at Sweetgreen, told CNBC this play is less “one size fits all” than what the chain has previously tried.

“It is everything from targeted and personalized offers to digital challenges to subscription and membership, and how can we potentially play in that space,” he said. “We’re re-envisioning the future of loyalty at Sweetgreen and this is one step in that journey.”

Phone it in: Sweetpass is also meant to drive customers to Sweetgreen’s digital ecosystem, as it can only be used for delivery and pickup orders made through its app and site.

• Mobile ordering is a big focus for Sweetgreen via digital channels like its app. The company’s digital revenue, as a total percentage, grew to 75% as of fiscal year 2020, up from 30% in 2016.—KM

Starbucks is staying ahead of President Biden’s vaccine mandate. The coffee giant will require all of its US workers to be either fully vaccinated against Covid-19 or get weekly tests.

• All ~220,000 US employees will have to disclose their vaccination status by January 10, COO John Culver wrote in a letter sent to employees in late December (and reiterated yesterday).
• The decision follows the fast-spreading omicron variant—and as the Occupational Safety and Health Administration (OSHA) laid out February 9 as the new deadline for large employers to comply with the federal vaccine-or-test mandate.

“If vaccination rates rise and community spread slows, we will adapt accordingly,” Culver wrote. “But if things get worse, we may have to consider additional measures.”

• For now, a source told Reuters that the coffee chain is not seeing closures like it did at the start of the pandemic.

Zoom out: The mandate has been a mixed bag within the retail industry. The National Retail Federation is among those that challenged the requirement in court, while companies like Walmart, Saks, and CVS instituted their own vaccine mandates (mostly for corporate employees).

But some experts believe a government-issued policy might make it easier for retailers to carry out policies.

“In contrast to individual companies enforcing vaccine mandates within their company, government-directed vaccine mandates are beneficial in that they take this decision out of the hands of the retailer and, to a certain extent, level the playing field across retailers,” Gautham Vadakkepatt, professor of marketing at the George Mason University School of Business, told Retail Dive in December. “Governments have the burden of ensuring public health.”—JS

Today’s top retail reads.

Turn on a dime: A piece of the Lower East Side is bringing back memories of Soho in the 90s. “There are a lot of stores, it’s really popping hard right now—it’s growing really fast,” said one new shop owner. (WWD)

Teaching moments: From 3D design to modeling digital avatars, fashion schools (and students) are taking to new tech. (Business of Fashion)

Load up: Everything you need to know about the truck-driver shortage. Or, what some say is really a “recruitment and retention problem.” (Vox)

Customer first: B2B or B2C or both, your e-commerce site is more important than ever. So check out dotdigital’s new e-book “Building the future of e-commerce” to learn how to create an ecosystem that supports growth and delivers a unique customer experience. Get the e-book here.*

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What happened in the world of retail this week in…1953 and beyond? Retail Brew takes you way, way, way back.

It turns out that the beginning of January has been a slow news week for years:

• On January 1, 2004, Chick-fil-A temporarily halted its “Eat Mor Chikin” campaign over concerns about mad cow disease.
• On January 2, 1953, the founder of Gucci, Guccio Gucci—say that three times fast—died.
• And on January 3, 2012, Peloton was founded. You know that had to have been timed for all those New Year’s resolutions.

Catch up on the Retail Brew stories you may have missed.

• “There will always be an appetite for mall-based shopping”: Draper James’s CEO on the brand’s brick-and-mortar plans
• Walmart is winning on click and collect, with more than a quarter of all orders in 2021
• Looking back on 2021’s five biggest US retail funding rounds