TORONTO and NEW YORK CITY—Saks Fifth Avenue owner HBC, recently targeted by activist investor Land and Buildings Investment Management, said Tuesday it had formed a strategic relationship with WeWork and Rhône Capital. The multi-faceted arrangement entails, among other things, Rhône making a $500-million investment in HBC and a joint venture of WeWork and Rhône acquiring the flagship Lord & Taylor building on Manhattan's Fifth Avenue for $850 million.

Along with the Lord & Taylor property sale, the arrangement between HBC and WeWork will entail a reciprocal benefits program to enhance their respective product offerings. The program is expected to allow WeWork's global membership to participate in exclusive HBC sales online and in store, and in turn, to give HBC customers access to WeWork's We Membership platform.

HBC has also struck agreements with WeWork to lease retail space within select HBC department stores. First up under these agreements will be the upper floors of the Hudson's Bay locations on Queen Street in Toronto and Granville Street in Vancouver and Galeria Kaufhof in Frankfurt.