Bay sees luxury U.S. retailer Saks as global brand with stores in Asia, Europe
Sep 24, 2013 / 11:56 am
MONTREAL - Hudson's Bay Co., which has signed a deal to buy Saks Fifth Avenue, is looking at expanding the U.S. luxury retailer with possible stores in Europe and Asia.
"We'd be one of the first to have a department store as a global brand," HBC president Bonnie Brooks said Monday following a speech to the Canadian Club of Montreal.
Brooks, who spent 11 years revitalizing Hong-Kong-based retailer Lane Crawford before joining the Bay in 2008, said Asia holds the greatest potential for global growth.
"Europe is certainly a possibility but Asia is more logical," she told reporters.
"It (Saks) has a niche that's special and that has been well publicized in films for decades and it has a lot of sex appeal."
Brooks, the voice of the Bay's radio advertising, said the first priority once the US$2.9-billion acquisition closes this year will be to open seven Saks stores in Canada.
The timing for the Canadian store openings is still being worked out, but Brooks said they could come within two years.
Brooks said at least one of the Saks Fifth Avenue stores will be located in Quebec, where she said "fashion-forward shoppers" are more familiar with the upscale brand than U.S. rival Nordstrom, which plans to open its first store in Canada next year.
Hudson's Bay will also open about 20 Saks Off Fifth Ave. outlet stores in Canada in addition to the full-sized department stores.
And the company (TSX:HBC) also plans a couple more Hudson's Bay outlets.
Brooks said the acquisition of Saks gives HBC access to different shoppers with its Saks, Lord & Taylor and Hudson's Bay stores.
Analyst Patricia Baker of Scotia Capital said a recent restructuring at HBC that includes bringing Marigay McKee from Harrods to head Saks is positive.
"The company will be able to better maintain the unique identity of each retail brand, while ensuring each is managed in an efficient manner that aligns to HBC's corporate goals," she wrote in a report.
Saks operates 42 stores across the U.S. and 70 Off Fifth Ave. locations, while HBC's holdings include 90 Hudson's Bay stores and 69 Home Outfitters in Canada.
HBC also owns 48 Lord & Taylor classic retail stores in the U.S.
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