You have reached your limit of free articles this month.

Enjoy unlimited access to SpringfieldNewsSun.com

Starting at just 99¢ for 8 weeks.

GREAT REASONS TO SUBSCRIBE TODAY!

  • IN-DEPTH REPORTING
  • INTERACTIVE STORYTELLING
  • NEW TOPICS & COVERAGE
  • ePAPER
X

You have read of premium articles.

Get unlimited access to all of our breaking news, in-depth coverage and interactive features. Starting at just 99c for 8 weeks.

X

Welcome to SpringfieldNewsSun.com

Your source for Clark and Champaign counties’ hometown news. All readers have free access to a limited number of stories every month.

If you are a News-Sun subscriber, please take a moment to login for unlimited access.

Hudson’s Bay to buy Saks for about $2.4 billion


NEW YORK (AP) — Don’t let the global economy fool you: Luxury is hardly dead.

Saks Inc. agreed to sell itself to Hudson’s Bay Co., the Canadian parent of upscale retailer Lord & Taylor, for about $2.4 billion in a deal that will bring luxury to more North American locales.

The acquisition combines three department-store brands — Hudson’s Bay, Lord & Taylor and Saks Fifth Avenue — and creates a North American upscale retailing behemoth with 320 stores in some of the biggest and most populous cities in the U.S. and Canada.

Saks operates stores in the Cincinnati and Columbus areas.

Lord & Taylor and Hudson’s Bay, Canadian’s biggest department store chain, both cater to well-heeled shoppers who can afford $98 Free People blouses and $250 Coach handbags but aspire to buy more luxury brands that they can’t necessarily afford yet. Saks customers, on the other hand, are more affluent and can shell out $800 for Christian Louboutin heels or a couple of thousand dollars for Gucci handbags.

During a conference call with investors on Monday, Hudson’s Bay Chairman and CEO Richard Baker, said that the goal is to bring up to seven Saks Fifth Avenue stores and 25 Off Fifth outlet stores to Canada, while creating a Saks website targeted to Canadians. Hudson’s Bay also plans to renovate Saks stores and to make the brand more “luxurious.”

Hudson’s Bay is making a play for luxury at a time when shoppers still appear to be willing to shell out money for posh handbags and expensive sports cars despite global economic challenges. It’s expected that global luxury sales rose 10 percent to $281.96 billion last year, according to the latest study from Bain & Co. In North American, it’s expected that luxury sales were up 12 percent to $81.33 billion.

Still, Saks has lagged behind its peers in the luxury sector. It’s been trying to keep up with its rivals Neiman Marcus and Nordstrom, which have performed well post-recession.

Hudson’s Bay will pay $16 per share for Saks, a 5 percent premium over the company’s Friday closing price of $15.31.

Saks’ stock jumped nearly 4 percent, or 56 cents to $15.88 in Monday trading. Shares are up 46 percent for the year to date.

The companies put the deal’s total value at about $2.9 billion including debt. FactSet says the New York-based retailer has about 150.2 million outstanding shares.

Saks will continue to run as a separate company under Hudson’s Bay and will have its own merchandising, marketing and store operations employees. Key management personnel are expected to remain with the company. But it wasn’t clear whether Sadove would be staying on.


Reader Comments ...


Next Up in Business

Millennials spend more on coffee, save less for retirement
Millennials spend more on coffee, save less for retirement

A large number of Millennials spent more on coffee in the past year than they invested in their retirement savings, according to a new study. » RELATED: What makes Millennials tick in the workplace? It may surprise you About 41 percent of the Millennials — ages 18 to 35 — admitted to spending more on coffee than they saved for retirement...
Some worry over impact from health care law repeal
Some worry over impact from health care law repeal

The U.S. House of Representatives on Friday joined the U.S. Senate in passing a budget reconciliation measure that would allow Congress to de-fund key elements of the Affordable Care Act, including tax credit subsidies and federal funding for Medicaid expansion in states like Ohio. While some are rejoicing over the move, replacing President Obama&rsquo...
Will Obamacare repeal leave people in the lurch?
Will Obamacare repeal leave people in the lurch?

As Congress moves forward on a resolution to repeal the Affordable Care Act, experts have warned such a measure could crash the law’s commercial insurance program, jeopardizing coverage for 11.5 million Americans, including more than 230,000 Ohioans. But local industry leaders remain hopeful that congressional Republicans — who are leading...
Holiday retail sales up, but some stores suffering
Holiday retail sales up, but some stores suffering

Retail sales hit about $658 billion for the holiday season, but several chain retailers still announced the closures of hundreds of unprofitable brick-and-mortar stores in January — including several stores locally. “These numbers show that the nation’s slow-but-steady economic recovery is picking up speed and that consumers feel...
Hospitals on standby as Obamacare repeal moves forward
Hospitals on standby as Obamacare repeal moves forward

Local hospital executives are waiting to react after the U.S. House of Representatives took another step toward repealing the Affordable Care Act, voting Friday to pass a budget resolution already passed by the Senate a day earlier that would allow Congress to change portions of the law. President-elect Donald Trump, who takes office on Jan. 20, has...
More Stories