The iconic Saks that made women gush (American or otherwise) will soon become the property of the Hudson’s Bay Company. The Canadian conglomerate is paying about $2.4 billion for the acquisition. It has been declared the next luxury giant by retail experts, with Saks Inc. and Lord & Taylor under its roof. “This exciting portfolio of three iconic brands creates one of North America’s premier fashion retailers,” Richard Baker, HBC’s chairman, and CEO said in a statement.
One could almost hear imaginary women chiming “fifth avenue” each time anyone mentioned the word ‘Saks,’ but those chimes would sound more choral maybe, what with the new entrants’ singings chiming in. With any hope, they won’t disappear altogether. Sure the merger would bring luxury to more North American locales, but it would also pose a New- York- winter- cold dampener to those who made pilgrimages to the swish Fifth Avenue store for little bags of exclusive- blessings. HBC plans to open up seven Saks Fifth Avenue stores and 25 Off Fifth outlet stores in Canada while creating a Saks website targeted at Canadians. The parent company also plans to renovate Saks stores and make the brand more “luxurious.”
Key management personnel is expected to remain with the company. “We are excited about what this opportunity and being part of a much larger enterprise can mean for the future of the Saks Fifth Avenue brand,” Saks Chairman and CEO Steve Sadove said in a statement. However, it remains unclear if he would be staying on. The buyout, approved by both companies’ boards, is targeted to close before the year’s end. It still needs approval from Saks’ shareholders.
Luxury retail was hit hard by the recession, and Saks was no exception, suffering from huge monthly sales declines. Synonymous with New York City (and fashion even), Saks lost some of its competitive edges. It’s been trying to keep up with its rivals Neiman Marcus and Nordstrom, which have performed well post-recession. Hudson’s Bay’s “deep pockets” may help fix this problem, though.