A RetailWire poll asked last month if Saks would be more or less likely to succeed should it be taken over by Hudson's Bay Co. (HBC). Forty-six percent said the deal would very likely succeed, while 27 percent said somewhat likely. Only 18 percent thought an acquisition would not succeed. Now, we'll all get to see who was right as HBC and Saks announced this morning that the two companies have entered into a definitive merger agreement.
The deal means that three "iconic" North American department stores — HBC, Lord & Taylor and Saks — will operate under one corporate umbrella. The new company will operate 320 units total, including 179 full-line department stores, 72 outlets, 69 home stores and three websites in the U.S. and Canada.
As is always the case with such deals, HBC touted it would save $100 million Canadian over three years as a result of synergies.
"I've had a long connection with Saks over the years, and am thrilled to bring one of the world's most recognized luxury retailers into the HBC family," said Richard Baker, HBC's chairman and CEO, in a statement. "With the addition of Saks, HBC will offer consumers an unprecedented range of retailing categories and shopping experiences. This acquisition will increase our growth potential both in the U.S. and Canada, generate significant efficiencies of scale, add to our powerful real estate portfolio and deliver substantial value to our shareholders."
"We believe this transaction delivers compelling value to our shareholders and that Saks Fifth Avenue is an excellent fit within the HBC organization," said Steve Sadove, chairman and CEO of Saks. "We also believe that HBC recognizes the tremendous value of our people, our real estate, our customer and vendor relationships, and most importantly the power and potential of our iconic brand. ... We have made significant progress over the past few years to position Saks for future growth and to evolve into an omni-channel retailer. We are excited about what this opportunity and being part of a much larger enterprise can mean for the future of the Saks Fifth Avenue brand."
HBC plans to introduce Saks into Canada with flagships, outlets and a strong online presence. Canada is already saks.com's largest "ship-to market" outside of the U.S. The company said it plans to take steps to upgrade customers' shopping experiences across all its banners while improving productivity in stores and through digital channels.
The company — we're assuming for Wall Street's benefit — made a point of highlighting its real estate assets, including "marquee owned properties" in New York, Beverly Hills, Toronto, Vancouver and Montreal.