Saks Inc. has agreed to sell itself to Hudson's Bay Co., the Canadian parent of upscale retailer Lord & Taylor, for about $2.4 billion.
The acquisition combines three department-store brands -- Hudson's Bay, Lord & Taylor and Saks Fifth Avenue -- and creates a North American upscale retailing behemoth with 320 stores in some of the biggest cities in the United States and Canada.
Hudson's Bay will keep the four Saks stores and five Lord & Taylor stores on Long Island open, a Hudson's Bay representative said.
Hudson's Bay will pay $16 per share for Saks, whose shares closed Monday at $15.95, up 64 cents. Shares of Hudson's Bay rose 96 cents to $17.45 on the Toronto Stock Exchange.
Lord & Taylor and Hudson's Bay, Canada's biggest department store chain, both cater to well-heeled shoppers who can afford $98 Free People blouses and $250 Coach handbags but aspire to buy more luxury brands that they can't necessarily afford yet. Saks customers, on the other hand, are more affluent and can shell out $800 for Christian Louboutin heels or a couple of thousand dollars for Gucci handbags.
In the latest fiscal year, Saks reported annual revenue of $3.15 billion, up more than 4 percent from the previous year but still below the $3.28 billion in the year ended in January 2008. Saks' net income fell nearly 16 percent to $62.8 million in the latest year.
Saks' flagship store on Fifth Avenue in Manhattan, founded in 1924 by Horace Saks and Bernard Gimbel, is a landmark of retailing and sits on some of the most valuable real estate in the world. The company employs about 15,000 people across 41 stores.
Hudson's Bay was founded in 1670 as a trading company for furs and other goods. It is considered the oldest company in operation in North America.
Saks will continue to run as a separate company under Hudson's Bay and will have its own merchandising, marketing and store operations employees.
With Nicole Levy