Saks Joining Lord & Taylor Spawns Luxury Juggernaut
It's been an active summer for upper-end department stores.
First Neiman Marcus filed its IPO. Now Saks Inc. is getting acquired by Hudson's Bay, the Canadian-owned parent company of Lord & Taylor, for about $2.9 billion. The deal makes Hudson's Bay a major luxury retailer player in the US now, with about 100 stores between the two chains in some of the most prime locations in the country. There are also plans to bring Saks up to Canada, according to reports.
What could this mean for landlords?
Well, it could mean less closures of under-performing Saks Fifth Avenue stores, something the retailer has been doing steadily over the last few years. Instead, those stores could now be converted into Lord & Taylor's Rick Snyder, a retail analyst at investment firm Maxim Group, who has rated Saks as a "buy" stock, suggested to us.
"Perhaps the demographics of that area would better suit a Lord & Taylor," he says, explaining that the chain isn't quite as high end as Saks.
In other news, Hudson's Bay might consider turning its stockpile of 320 stores totaling 16 million square feet into a REIT, according to reports. Over the years we have heard of other retailers, like McDonald's and Sears Holdings, considering such a move, but haven't seen anything quite like that yet.
What do you think the Saks-Lord & Taylor marriage means for mall owners? Is this a good thing or bad?