Huge retail news is breaking today as the Canadian store-formerly-known-as-The-Bay, Hudson's Bay, is planning to acquire U.S. retailer Saks and its 42 stores in a $2.9 billion buy-out.
The purchase of Saks caps a seven-year run of deal-making for Hudson's Bay Chief Executive Richard Baker, a longtime real estate investor who, last year, sold Zellers to Target and also attempted to take over Bloomingdales. In 2008, you may also remember Hudon's Bay scoring a deal with department store chain Lord & Taylor, however, the clothing retailer has still yet to make its move this side of the border.
Naturally, with Saks added to its portfolio, many are hoping the luxury chain will join Hudson's Bay in the snowy North, but according to news outlets, HBC "plans to keep Saks as a separate unit headquartered in New York and introduce the Saks brand in Canada through online and other formats." I'm not sure what that means other than Canada shipping and what? Pop-up shops on Queen West?
"This exciting portfolio of three iconic brands creates one of North America’s premier fashion retailers," says Baker in a press release. "This acquisition will increase our growth potential both in the U.S. and Canada, generate significant efficiencies of scale, add to our powerful real estate portfolio and deliver substantial value to our shareholders."
Value to shareholders yes, value to customers, hmmm. Hudson's Bay is quickly positioning itself as an unmatched conglomerate when it comes to clothing retail. This recent news only adds to the incestuous nature of the North American market, where profit and growth comes first. Just recently Loblaws took over Shoppers Drug Mart in a $12.4 billion deal, meaning that the end game looks as though a select handful of companies could soon monopolise certain sectors (ahem, Rogers/Bell and Chapters/Indigo anyone?). All is left now is for Hudson's Bay to drop a pretty penny on Sears and we're almost back to the 19th century monopoly enjoyed by HBC during its fur trading years.
Image via The Bay