What's the big deal about The Bay buying Saks 5th Avenue?

What's the big deal about The Bay buying Saks 5th Avenue?

Postby J Kendrick » Mon Jul 29, 2013 12:32 pm

Why are the local media making such a big deal about The Bay buying Saks... as if it were a Canadian company buying out an American retailer?

The Bay is *not* Canadian owned. The Bay is owned by NRDC Equity Partners of New York.

It's just another case of one big New York-based company buying out another. The fact that NRDC Equity is going through a Canadian named company to do it is only incidental.
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Re: What's the big deal about The Bay buying Saks 5th Avenue

Postby Howaboutthat » Mon Jul 29, 2013 5:45 pm

J Kendrick wrote:Why are the local media making such a big deal about The Bay buying Saks... as if it were a Canadian company buying out an American retailer?

The Bay is *not* Canadian owned. The Bay is owned by NRDC Equity Partners of New York.

It's just another case of one big New York-based company buying out another. The fact that NRDC Equity is going through a Canadian named company to do it is only incidental.


Maybe it's because the people who actually work in newsrooms today, don't go looking for reasons NOT to run stories.
It was on US media all day as well. The Hudson's Bay headquarters are in Toronto. It is a Canadian company.
Two iconic brands getting together - that makes it a story.
Stop being pedantic and anal.
Houston, We're dealing with morons!.
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Re: What's the big deal about The Bay buying Saks 5th Avenue

Postby jon » Mon Jul 29, 2013 7:00 pm

I think the Canadian Press did a nice job of bringing out the Canadian side of the story in their article (see below).

Such as:
- the first Saks stores in Canada, some replacing existing Hudson's Bay stores, cutting out a chunk of some existing Hudson's Bay stores to make stand-alone Saks stores, and the rest in new locations
- Saks lines of merchandise in Hudson's Bay stores
- 25 Saks Off Fifth outlet stores opening in Canada
- some of the funding for the deal is from Canadian sources
- a lot of Canadian investors own HBC stock

HBC to open seven Saks full-line and discount stores in Canada once deal closes
By Alexandra Posadzki, CP
July 29, 2013 4:14 PM

Luxury U.S. retailer Saks will soon open its doors in Canada with plans to launch up to seven stores north of the border, after being snatched up Monday by Hudson’s Bay Co. for US$2.9-billion.

In addition to expected operational savings of about $100 million and a portfolio of prime U.S. real estate, one analyst said the deal will give HBC (TSX:HBC) greater fashion credibility.

“Saks is such a revered name in fashion,” said Wendy Evans of Evans and Company Consultants Inc. in Toronto.

“It’s been around for a long, long time — since the 1920s. There’s an aura about it.”

Evans said the deal will broaden the selection of premium brands available to Canadians, including the in-store Saks line, and will also give HBC access to some of the retailer’s designers.

The high-end U.S. department store chain carries brands such as Hugo Boss, Prada, Giorgio Armani, Chanel and Dolce and Gabbana.

For some Canadian shoppers, news of the upscale chain’s foray into Canada, was overdue.

Adrian Salamunovic, a business owner who lives in Ottawa, said he’s been shopping at Saks for about seven years.

Salamunovic, 37, was thrilled to hear that Saks will be opening up to 25 of its Saks Off Fifth outlet stores in Canada, which sell designer brands at discount prices.

Salamunovic said he often visits these stores when he’s staying at his second home in Los Angeles to pick up brands such as Vince, John Varvatos and the Made & Crafted line by Levis — all of which he says are difficult to find in Canada.

“Especially in Ottawa, there’s limited selection of fashion brands for men,” he said.

“The stuff they have on the shelves is always very well selected. It is expensive. I mean, it’s on the higher end of the pricing spectrum, but still reasonable, still affordable.”

Ada Wong, an executive assistant, writer and self-described shopaholic, said she’s visited the flagship Saks store in Manhattan, N.Y. — a popular tourist destination — to pick up items from Gwen Stefani’s L.A.M.B. line for her friends.

“I think the people there are kind of snooty, but at the same time they offer some exclusive lines,” said the 34-year-old Toronto resident.

“We live in a world-class city, and we deserve some of these world-class brands here.”

Richard Baker, HBC’s chairman and chief executive, didn’t provide a timeline for the launch.

“We’re going to move as quickly as we can,” Baker told analysts during a conference call on Monday.

Saks currently operates 42 stores across the U.S., while HBC’s holdings include 90 Hudson’s Bay stores and 69 Home Outfitters in Canada.

HBC also owns 48 Lord & Taylor luxury retail stores in the U.S. Northeast.

Together, the combined company will comprise more than 32 million square feet of retail space and rake in about C$7.2 billion of sales annually.

HBC said it may transform some of its Hudson’s Bay stores into Saks locations, open new Saks stores in existing buildings or, in some cases, build new stores from the ground up.

The Toronto-based retailer is also eyeing the possibility of starting a real estate investment trust.

“The combination of Saks and HBC real estate creates an unmatched, highly valuable North American retail real estate portfolio, with a coast-to-coast footprint serving three strong banners,” Baker said.

Paul Swinand, an analyst with Morningstar in Chicago, said the prime real estate portfolio was likely one of the biggest draws for HBC.

“There’s no way they could have accessed these real estate assets at any other price, or in any other way,” said Swinand.

“These are assets in locations where you couldn’t get that size of a store otherwise.”

However, Swinand noted it will be a challenge for HBC to improve Saks’ operating margin, which is in the low-single digits.

“They have high sales per square foot, but their profitability has not been that great,” he said.

Baker said HBC will keep the stores under separate banners, and plans on renovating the Saks stores and working with more vendors to make the chain “as luxurious as possible.”

“We think that Saks is very well positioned in the luxury market in the United States, but we think there’s a great opportunity to improve that positioning,” he said.

HBC, which has been eyeing the struggling high-end American chain for the past few months, said it will pay US$16 per Saks share plus assume debt as part of the transaction.

It will issue US$1 billion worth of equity and $2.3 billion of debt securities to pay for Saks.

It has received funding from the Ontario Teachers Pension Plan, which will buy about US$500 million of the equity, and Canadian private equity firm West Face Capital, which will buy US$250 million of the new HBC equity.

Hudson’s Bay Co. will also issue US$1.9 billion of secured loans and US$400 million of unsecured notes.

Saks will pay a fee to HBC if the deal doesn’t go through, but HBC would not specify the amount.

HBC shares closed up 96 cents, or 5.82 per cent, to $17.45 on the Toronto Stock Exchange Monday.

Saks shares (NYSE:SKS) closed up 64 U.S. cents, or 4.18 per cent, to $15.95, on the New York Stock Exchange.
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Re: What's the big deal about The Bay buying Saks 5th Avenue

Postby Rocky » Mon Jul 29, 2013 8:27 pm

J Kendrick wrote:Why are the local media making such a big deal about The Bay buying Saks... as if it were a Canadian company buying out an American retailer?

The Bay is *not* Canadian owned. The Bay is owned by NRDC Equity Partners of New York.

It's just another case of one big New York-based company buying out another. The fact that NRDC Equity is going through a Canadian named company to do it is only incidental.


A bit of business news on a story like this makes much more sense than Global spending the first 15 minutes of newstime a few weeks ago about an over-rated junkie offing himself in a hotel room.
I thought the news had been pre-empted by E-T for a few nights there!
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Re: What's the big deal about The Bay buying Saks 5th Avenue

Postby mccrady » Mon Jul 29, 2013 8:59 pm

I sat watching CTV Edmonton's coverage of the Saks story and two women, the anchor and the consumer affairs reporter, gushing at each other over the prospect of a Saks outlet opening here.

I can well imagine their respective spouses watching at home and cringing about what turning them loose in an Edmonton Saks would do to their credit card bill.

I'd say women are interested ... and that makes it a story. Men ... not so much.
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Re: What's the big deal about The Bay buying Saks 5th Avenue

Postby J Kendrick » Mon Jul 29, 2013 9:32 pm

The Hudson's Bay Company was first bought by American Jerry Zucker in 2006 for $1.1 billion. Two years, later NRDC Equity... owners of Lord & Taylor... bought HBC from Zucker's estate in 2008.

At the time, NRDC (National Realty and Development Corp.) was supposed to launch 15 Lord and Taylor stores in Canada... and to give Zeller's more focus on branded products and roll out a new 125,000 foot prototype store...

And where did that lead us?

As of yet, there are no Lord & Taylor stores north of the border... and we all know what has happened to Zeller's since then.

South of the border, the sale of Saks is being promoted as having been bought by Lord & Taylor's parent company... Canada's HBC...

What none of these stories has reported, however, is that HBC's parent company is now NRDC Equity of New York... which had owned Lord & Taylor long before it ever bought HBC.

The true buyer of Saks here is NRDC Equity... and the media are being played by NRDC's name game...
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Re: What's the big deal about The Bay buying Saks 5th Avenue

Postby J Kendrick » Mon Jul 29, 2013 9:49 pm

NRDC Equity is owned by Richard A. Baker of Connecticut... who currently poses as the chairman of HBC...
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Re: What's the big deal about The Bay buying Saks 5th Avenue

Postby former tv guy » Tue Jul 30, 2013 5:42 am

J Kendrick wrote:The Hudson's Bay Company was first bought by American Jerry Zucker in 2006 for $1.1 billion. Two years, later NRDC Equity... owners of Lord & Taylor... bought HBC from Zucker's estate in 2008.

At the time, NRDC (National Realty and Development Corp.) was supposed to launch 15 Lord and Taylor stores in Canada... and to give Zeller's more focus on branded products and roll out a new 125,000 foot prototype store...

And where did that lead us?

As of yet, there are no Lord & Taylor stores north of the border... and we all know what has happened to Zeller's since then.

South of the border, the sale of Saks is being promoted as having been bought by Lord & Taylor's parent company... Canada's HBC...

What none of these stories has reported, however, is that HBC's parent company is now NRDC Equity of New York... which had owned Lord & Taylor long before it ever bought HBC.

The true buyer of Saks here is NRDC Equity... and the media are being played by NRDC's name game...


And does the average listener give a tinker's damn? No.
I saw a post about a year ago from someone who said you posted here just to get people to 'talk' with you. I'm beginning to think that's the case - so I'm done with you on this topic.
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Re: What's the big deal about The Bay buying Saks 5th Avenue

Postby Jack Bennest » Tue Jul 30, 2013 9:13 am

I'm a news guy - some may laugh at that

I think Kenrick is accurate but in a world where there is not much "real" news - anything is fodder for a Monday.

Radiowest is to exchange comments and ideas - even argue a bit.

The part that should be discouraged is personal pot shots. I know I know I pick on Sykes but that has been the situation since
we chased around the station under the stairs in the seventies.

:towel:
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Re: What's the big deal about The Bay buying Saks 5th Avenue

Postby SteveLegault » Tue Jul 30, 2013 11:25 am

Jack Bennest wrote:The part that should be discouraged is personal pot shots.

:towel:


I couldn't agree more....have seen some rather vicious verbal attacks on people in the short time I've been here

No need
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Re: What's the big deal about The Bay buying Saks 5th Avenue

Postby J Kendrick » Tue Jul 30, 2013 11:30 am

Jack Bennest wrote:I'm a news guy - some may laugh at that

I think Kendrick is accurate but in a world where there is not much "real" news - anything is fodder for a Monday.

Radiowest is to exchange comments and ideas - even argue a bit.



Thank you, Jack. :-)

This is yet another case of today's alleged reporters not knowing the full background of the stories they are doing... and not asking serious questions.

It is yet another case of the media today just being led by the nose by those who are telling them these stories... and publishing whatever story the PR guys want them to publish without any challenge.

You will no more be able to buy a pair of fancy new shoes at a Saks store here in Canada in 2014/15 than you can now buy a fancy pair of new shoes at a Canadian Lord & Taylor store ... or you can now buy a new pair of jeans today at an upgraded and expanded Zeller's ... just as we had all been promised back five years ago when Mr. Richard A. Baker's NRDC Equity first took over The Hudson's Bay Company back in 2008.

The truth here is: The only thing this deal really does is that it would now allow Saks to be traded on the Toronto Stock Exchange. End of story.

Saks will continue to operate as a separate company with its own merchandizing and marketing and will be allowed to retain its own management. Saks stockholders still have 40 days to approve the deal and to seek alternative bids... and there is still a possibility that Saks could receive a superior offer before that 40 days runs out.
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Re: What's the big deal about The Bay buying Saks 5th Avenue

Postby Big Voice » Tue Jul 30, 2013 9:42 pm

ZZZZZZZZZZZZZZZZZ
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Re: What's the big deal about The Bay buying Saks 5th Avenue

Postby xwdcatvb » Wed Jul 31, 2013 9:14 pm

Rocky wrote:
A bit of business news on a story like this makes much more sense than Global spending the first 15 minutes of newstime a few weeks ago about an over-rated junkie offing himself in a hotel room.
I thought the news had been pre-empted by E-T for a few nights there!


Ouch, but two people in this household, and several friends wondered the same, and not only about Global...
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