Saks Reportedly Explores Possible Sale

NEW YORK CITY-Saks Inc., which operates the Saks Fifth Avenue, Saks Fifth Avenue OFF 5TH and Saks Direct retail brands, has hired Goldman Sachs to explore strategic alternatives including a possible sale of the company, the New York Post reported Tuesday afternoon. A spokeswoman for the locally based retailer tells GlobeSt.com the company has no comment on the Post report.

Citing an unnamed source, the Post reported that Saks tapped Goldman in recent weeks, and that if the company were to put itself up for sale, likely bidders would include large private equity firms, including Leonard Green & Partners and KKR. The company's iconic Fifth Avenue flagship store is believed to be worth more than $1 billion by itself, the Post reported.

Separately, Saks on Tuesday reported net income of $20 million for the first quarter that ended May 4. Store closing costs and a $7.8-million non-cash loss on extinguishment of debt ate into what would have been net income of $30.1 milion for Q1, according to Saks, and was off from quarterly income of $32.1 million the year prior.

Nonetheless, chairman and CEO Stephen Sadove counts himself pleased with the company's 5.9% same-store growth, “which was on top of a solid 4.8% increase in last year's first quarter,” he says in a release. “I am also pleased that we maintained a 44.4% gross margin rate, which was flat with last year, in an increasingly promotional environment. As expected, we experienced SG&A deleverage in the quarter as we continued to invest in our omni-channel and other important initiatives.”