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The Hudson’s Bay Company (HBC) has just purchased American luxury retailer Saks Fifth Avenue. This paves the way for Canadian Saks Fifth Avenue store locations, as well as its discount chain Off 5th to open Canada-wide.

Hudson’s Bay will pay about $2.9 billion, including taking on Saks debt. Hudson’s Bay could open as many as 7 full-line Saks stores in Canada, as well as up to 25 Off 5th discount locations. It could also create a real estate investment trust from Saks real estate assets, valued at about $1.5 billion

Last week we reported that Barry Sternlicht of Starwood Capital was bidding on Saks, and that he was the frontrunner. Sternlicht since dropped his bid after his business partner decided against the deal. 

We reported on the three potential Saks buyers, including Hudson’s Bay, Sternlicht and an unknown Middle-Eastern purchaser. With Sternlicht out of the race, only two potential purchasers remained. 

Hudson’s Bay Company Chairman Richard Baker

Last year HBC was in negotiations with American retailer Bloomingdale’s to open stores in Canada. The deal fell through and HBC subsequently went after Saks. 

Hudson’s Bay may find it difficult to make Saks succeed in Canada. Holt Renfrew achieves substantial sales per square foot. Excluding Saks’ Manhattan and San Francisco flagships, Holt Renfrew stores achieve considerably higher sales per-square-foot than most Saks stores. Not to mention, Holt Renfrew has exclusive distribution agreements with many designers already carried at Saks’ American stores. 

With Nordstrom on the wayHarry 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. At the same time, an HBC-owned Saks Fifth Avenue may lend substantial credibility and economies of scale to HBC. 

Saks’ outlet concept ‘Off 5th‘ is also expected to come to Canada. Off 5th carries both discounted merchandise from Saks’ full-priced stores, as well as products purchased specifically for the outlet store. Off 5th stores will compete with Nordstrom Rack and Holt Renfrew’s recently opened hr2 concept. 

Saks’ purchase by HBC will lead to Saks stores opening in Canada, either free-standing or within existing Hudson’s Bay store space. Last month we first reported on HBC’s potential purchase of Saks. We subsequently discussed possible Canadian Saks locations. HBC has been contemplating a potential Saks purchase for months and we’re re-posting our analysis of some possible locations for Saks in Canada.

Newer American Saks Fifth Avenue stores are generally in the 80,000-120,000 square foot range. Hudson’s Bay has 90 Canadian stores. Several are in Saks-worthy locations. Although we’d only expect Toronto, Calgary and Vancouver to get Saks stores, we’ve do a more comprehensive metro-area breakdown of possible full-line or shop-in-store Saks Fifth Avenue locations via HBC.

Greater Toronto Area
Yorkville: Hudson’s Bay’s 342,000 square foot store at Toronto’s Yonge and Bloor intersection could be at least partially converted into a flagship Saks Fifth Avenue store. The store’s current low ceilings might be remedied by a demolition and reconfiguration of the interior retail space, though this would certainly be an expensive challenge. A Saks Fifth Avenue store on Toronto’s Bloor Street would compete with neighbouring Holt Renfrew, which will see a substantial expansion in the next few years.

Downtown Toronto: Hudson’s Bay’s 851,000 square foot flagship ‘Queen Street’ store has room for a Saks store, though it would require an awkward reconfiguration of the store’s current setup. We’re not sure if a Saks would be preferable up at the Yorkville Hudson’s Bay while the Queen Street location remains as the primary flagship location for Hudson’s Bay and its related concessions (including a 19,000 square foot TopShop/TopMan and a 20,000 square foot Kleinfeld Bridal, which opens on the store’s seventh floor next year). 

Yorkdale Shopping Centre: The 303,000 square foot Hudson’s Bay store at Yorkdale has recently seen extensive renovations including Canada’s first full-sized TopShop/TopMan store. If Saks were to carve out, say, a 100,000 square foot portion of Yorkdale’s Bay, that would still leave 200,000 square feet for the primary tenant. Saks would see significant competition at Yorkdale with a world-class renovation/expansion of the mall’s Holt Renfrew store, the addition of a 188,000 square foot Nordstrom store and possibly the arrival of anchor La Maison Simons

Sherway Gardens: The 223,000 square foot Sherway Gardens Hudson’s Bay could see a Saks shop-in-store. A full-sized Saks is less likely because of Hudson’s Bay’s smaller size. Sherway would be a good move for Saks, as competitor Holt Renfrew will exit Sherway when it opens its Mississauga store in 2016. Nordstrom’s 2016 Sherway Gardens arrival will boost the mall’s popularity and Saks will more likely compliment Nordstrom than provide outright competition, given their limited brand cross-over. 

Square One Shopping Centre, Mississauga: The 201,000 square foot Hudson’s Bay could see a Saks shop-in-store similar to Sherway Gardens, as discussed above. Despite Square One’s having Target and Walmart as anchors, Saks could actually fit in the mall now that it will include a 120,000 square foot Holt Renfrew store and possibly a branch of La Maison Simons

Hudson’s Bay, Downtown Calgary

Downtown Calgary: Downtown Calgary’s 450,000 square foot Hudson’s Bay store could see a subdivision to include a Saks Fifth Avenue store. Downtown Calgary already includes a 147,000 square foot Holt Renfrew store that will soon expand. One major disadvantage to locating within Downtown Calgary’s Hudson’s Bay is the insufficient pedestrian access to the neighbouring Core Shopping Centre that houses Holt’s, Harry Rosen and a substantial number of other retailers. Downtown Calgary’s Hudson’s Bay suffers as a result and won’t see the same renovations, TopShop/TopMan and ‘The Room‘ concepts as seen in Toronto and Vancouver. 

Chinook Centre: Hudson’s Bay’s 203,000 square foot Chinook Centre store could possibly see some sort of smaller Saks Fifth Avenue shop-in-store. At its present size and with the inclusion of a soon-to-open 15,000 square foot TopShop store, Chinook Centre’s Bay would be too small for a full-sized Saks. It is possible that a Saks could open as part of Chinook Centre’s newest expansion proposal, though the expansion appears to lack an additional anchor tenant. A bonus to a Chinook Centre Saks, however, would be less competition from the downtown Holt Renfrew store and increased shoppers drawn to the 140,000 square foot Nordstrom store that will open next year

Hudson’s Bay, Downtown Vancouver [Image Source]

Downtown Vancouver: The 637,000 square foot Hudson’s Bay store in Downtown Vancouver could see a Saks Fifth Avenue store somehow carved out of its existing store space. Vancouver’s Hudson’s Bay has already seen its space reduced with the opening of one of the world’s largest TopShop/TopMan stores as well as the eventual elimination of the entire sub-basement retail space for one or more tenants (likely not Saks, given its low ceilings and awkward location). A Downtown Vancouver Saks would be in close proximity to an existing 137,000 square foot Holt Renfrew and a 230,000 square foot Nordstrom which will open in 2015

Oakridge Centre: Saks has already been inquiring into space at Oakridge Centre (as has Bloomingdale’s). Anchor space at Oakridge could be somewhat flexible and as far as we’re aware, Hudson’s Bay will occupy a newly-built north-anchor space at Oakridge. A new Saks could be included if proposed Oakridge retail space is reconfigured, or if it secures a new third anchor space at the south end of the mall.

Hudson’s Bay, Rideau Street, Ottawa [Image Source]

Rideau Centre: A Saks Shop-in-store (or even a smaller full-line Saks) carved out of the 335,000 square foot Ottawa Rideau Street Hudson’s Bay store would compliment Rideau Centre’s Nordstrom store (which will open in 2015) as well as La Maison Simons, also in 2015. Competitor Holt Renfrew, located way over at 240 Sparks Street in Downtown Ottawa, could see an uncertain future as a result of a Saks opening in Ottawa.

Finding a suitable location for Saks in Edmonton might be a challenge, though some sort of Saks shop-in-store might work within Hudson’s Bay’s 237,000 square foot Southgate Shopping Centre store. The West Edmonton Mall Hudson’s Bay, at only 164,000 square feet, would likely be too small for any Saks configuration. Downtown Edmonton’s Holt Renfrew, one of the chain’s lesser-performing stores, could see a reduction in sales with a Saks opening in one of Edmonton’s suburban malls.

We’ve consulted with a retail analyst who says they’re not sure if Montreal’s economy or language laws would welcome Saks Fifth Avenue to the city at the moment. Downtown Montreal has a 655,000 square foot Hudson’s Bay store that is currently undergoing renovations to include luxury department ‘The Room’.

We’ll keep you updated on HBC’s possible Saks purchase. As we mentioned, an announcement could be made as early as this week.

***Update (8:00pm PST, July 28 2013) The New York Post also reports Saks has been bought by HBC. Update: 8:18pm PST The Globe & Mail reports HBC is expected to pay about $16 (U.S.) a share for Saks, making a purchase price of about $2.4 billion.***

[HBC Press Release]

[Saks Fifth Avenue website]

[Hudson’s Bay Company website]



  1. Excellent question! HBC will have to determine what would be more cost effective – modifying their existing Bloor & Yonge space for Saks, or creating an entirely new space. We expect it would be more cost effective to do the former, though we certainly stand to be corrected.

  2. Hello 'Unknown', we think HBC will utilize space within their existing Hudson's Bay flagship store in Downtown Vancouver. It would be 1) much more cost effective and 2) much quicker to utilize existing Bay space for Saks rather than building an entirely new store. It could be the case that, eventually, a free-standing Saks store could be built in Downtown Vancouver. In the shorter term, however, free standing would be difficult to coordinate – it would require site acquisition, planning and design, and construction implementation. That could take 2-3 years. Building a 100,000 square foot Saks within Vancouver's existing Hudson's Bay could be completed within 12 months with no rent -just the cost of renovations.


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