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last updated 8 January 2015

Retail: Hudson’s Bay to buy Saks

Saks Fifth Avenue “is going Canuck,” said Tiffany Hsu in the Los Angeles Times. The luxury retail chain is selling itself to Hudson’s Bay, the Canadian department store brand, for $2.9 billion. Hudson’s Bay, which already owns department store chain Lord & Taylor, will pay $16 a share to buy New York City–based Saks, Inc.—“a 30 percent premium to Saks’s stock price on May 20, just before speculation emerged about a possible acquisition.” Both companies’ boards have okayed the deal, but it still needs approval from shareholders and regulators.

The Saks acquisition “would create a behemoth in the retail world,” said Peter Lattman and Stephanie Clifford in The New York Times. The combined company will own 320 stores, including 179 full department stores. Hudson’s Bay edged out “a number of other Saks suitors,” including Kohlberg Kravis Roberts and the Qatar Investment Authority. While many department stores have struggled, largely because of Internet competition, Saks “continues to benefit from luxury shoppers who, after closing their wallets during the recession, have come back in force since.” In 2012, its sales rose 4.4 percent, reaching $3.15 billion, and company executives said Saks had continued to rake in cash from foreign tourists.

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