Breaking news: Hudson’s Bay to buy Saks!

Breaking news:  Hudson’s Bay to buy Saks!

Last week we reported on a potential bidding war for Saks. Well, break out the maple syrup! Lovable Canuck powerhouse Hudson’s Bay Company (the folks behind Lord & Taylor) have won in a deal valued at $2.9 billion ($16 per share).

In a statement, Richard Baker, HBC’s chairman and CEO added “This exciting portfolio of three iconic brands creates one of North America’s premier fashion retailers.” In a conference call HBC outlined plans for Saks expansion into the Great White North.

Here is last week’s story (adding a ton of details on the deal):

New strategies, location expansions and an almost 5% rise in sales might not be enough to change the tides for luxury department store chain Saks, Inc.

According to a reports in Bloomberg and Women’s Wear Daily (WWD), investment powerhouse Starwood Capital has entered the bidding sweepstakes matching competing offers from Hudson’s Bay Company (HBC) that are rumored to be as much as $18 per share. This could place the company’s value anywhere upwards of $2.5 billion heading towards $3 billion.

Ever since the Financial Crisis of 2007, many retail brands have suffered waning sales and turned to private buyouts to change their fortunes. Saks had already gone through contraction closing over a dozen locations and circling the wagons in the midst of the meltdown. Of late, they had seemed to “right the ship” with new technologies, online sales, more fashion-forward inventory and creative customer programs aimed at a broader audience engagement and target marketing. Even with the luxury market showing health stateside as luxury buyers turn to the US in the wake of the Eurozone crisis. Saks management has entered into confidential negotiations with private investors to see if their fortunes can change leveraging the powerful backing of these reputed “turnaround experts”.

Superstar executive Barry Sternlicht and his Starwood team have been quite aggressive across many sectors, and they have clearly taken an interest in the retail sector. Saks’ existing infrastructure and powerful brand name have garnered great interest and a possible bidding war could be under way.

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