What woman wouldn’t want to buy Saks 5th Avenue? Lock, stock,and crown jewels. Where are the women to do this deal?
And an attractive deal it is: Saks not only has cut its debt but owns many of its stores, including its 5th Ave flagship store at the center of the global fashion world. On the other hand, the Saks image, quality, design choices, and service are not what they were under Rose Marie Bravo. What an opportunity for a luxury turn around!
According to The Economist at the time, Proffitt’s bought Saks for 1.3 times sales from Investcorp (before changing its own name to Saks) in 1998. The Economist’s analysis of that acquisition is here: http://www.economist.com/node/142603
And a fascinating business history of Saks is here: http://cyrus.piedmont.edu/users/mgardner/Saks_Paper_6-22-05.html
Just days ago, Hudson’s Bay Trading Company of Canada emerged as an interested party.
Hudson’s Bay seems to have done rather well with its Lord & Taylor acquisition, turning it around nicely so far, but its own IPO priced at the low end in the wake of that acquisition, and Saks is a very different creature, up there in the high end luxury market. The inventory is very expensive, the discounting and marketing rules complex. Does anyone remember how Brad and Brian Martin nearly did Saks in with their vendor allowance fraud and deferral of markdowns? Played right, a store like Saks can drive vendor styles and make fashion and profit, played wrong, it can destroy a market niche as Saks did with designer and bridge Petites and executive dressing and can quickly destroy itself. It’s a very complex business.
Saks Vendor allowances, other fraud http://money.cnn.com/magazines/fortune/fortune_archive/2005/08/22/8270030/ http://www.cleveland.com/business/index.ssf/2013/05/pilot_flying_j_director_overse.html Influence and destruction of Petite niche across industry http://www.nytimes.com/2006/05/28/business/28petite.html?_r=0
As for Rose Marie Bravo, if popularly ‘elected’, would she serve?