NYC-based Saks Fifth Avenue could be purchased by The Hudson’s Bay Company (“HBC”) according to Women’s Wear Daily. This could pave the way for Saks Fifth Avenue’s opening stores in Canada, according to HBC CEO Richard Baker. Saks has already been eyeing Canadian store space.
Baker says that some Hudson’s Bay stores could be converted to Saks stores. We are analyzing Hudson’s Bay store locations and we’ll provide an update on what stores we feel could become Saks locations. Saks could also occupy store space within existing Hudson’s Bay stores.
Last year HBC was in negotiations with American retailer Bloomingdale’s to open stores in Canada. The deal fell through and HBC now appears to be seeking a similar strategic alliance, this time with Saks.
It is debatable whether or not Saks would succeed in Canada. Holt Renfrew achieves substantial sales at the higher-end department store spectrum. Excluding Saks’ Manhattan flagship, Holt Renfrew stores do considerably higher per-square-foot sales than most Saks stores. With Nordstrom on the way, Harry Rosen in expansion mode and La Maison Simons looking to expand its Canadian base, opening Saks Fifth Avenue in Canada could prove to be challenging for HBC if a deal is, indeed, finalized. At the same time, an HBC-owned Saks Fifth Avenue could lend substantial credibility and economies of scale to HBC.
Saks’ outlet concept ‘Off 5th‘ could also come to Canada if a deal is signed. Off 5th carries both discounted merchandise from Saks’ full-priced stores, as well as product purchased specifically for the outlet store. Off 5th stores, if they arrive in Canada, would compete with Nordstrom Rack and Holt Renfrew’s recently opened hr2 concept.
We’ll be following up with an analysis of Hudson’s Bay’s real estate to determine optimum space/locations for Saks Fifth Avenue stores in Canada.