Estimated read time: 2-3 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
NEW YORK (AP) — Hudson's Bay, the owner of Saks Fifth Avenue, is being taken private by a group of its shareholders that will try to revive the department store chain.
The deal, which is expected to close later this year or early next year, comes as Hudson's Bay, like many retailers, has struggled amid shifting consumer behavior. Shoppers are buying more online, and they're also looking to buy used designer goods and embracing rental services like Rent the Runway.
Hudson's Bay has been selling businesses, including Lord & Taylor and some European businesses. The Canadian company has about 300 stores, including its namesake Hudson's Bay. Saks Fifth Avenue has been a bright spot for the company, though sales at established stores slowed down in the second quarter. Saks is finishing up a $250 million renovation of its Fifth Avenue flagship in Manhattan, which includes an overhaul of its beauty area. It also just opened a new floor dedicated to fine jewelry called The Vault.
Other luxury department stores are going through big changes amid a rocky landscape.
Iconic Barneys New York has reached a deal with Authentic Brands Group, a licensing company that owns brands like Aeropostale, and B. Riley Financial to buy all of its assets for $271.4 million in bankruptcy — unless another bidder offers more. Under this deal, all seven stores would likely close. And Saks Fifth Avenue is working with Authentic on a potential agreement to license the Barneys name. Barneys New York filed for bankruptcy over the summer.
Meanwhile, Nordstrom is reportedly trying to go private again, more than a year after the Nordstrom family members made a failed takeover bid . On Monday, the Seattle-based company offered reporters a peak of its first women's flagship store in Manhattan, which features lots of new services and seven food and beverage areas. Shoppers can order a drink or an appetizer and have it served to them while they're shopping in the shoe department. The seven-level 320,000-square-foot store, which will open Thursday, marks its latest and biggest expansion into Manhattan.
Hudson's Bay said Monday that its common shares will be purchased for 10.30 Canadian dollars ($7.86) per share in cash, in a deal valued at more than $1.4 billion. The shareholder group, which includes Hudson's Bay Executive Chairman Richard Baker, initially proposed in June a buyout offer of 9.45 Canadian dollars ($7.21) per share. The shareholder group owns 57% of the company.
In August, Hudson's Bay agreed to sell Lord & Taylor to rental clothing company Le Tote. Under that agreement, Hudson's Bay and a subsidiary will own the stores and Le Tore will operate from them. And earlier this month it completed the sale of its European real estate and retail joint ventures.
AP Business Writer Michelle Chapman contributed this report from Newark, New Jersey.
Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.