Saks Inc. (Birmingham, Ala.) and the Neiman Marcus Group (Chestnut Hill, Mass.) are expected to be the first two retailers to step forward for the Brooks Brothers fire sale. British retailer Marks & Spencer, owner of the venerable New York menswear chain, had announced on Thursday that it was putting all of its non-U.K. retail holdings up for sale.
Brooks Brothers, which also sells some womenswear, currently operates 80 retail and 72 factory stores in the U.S. and sells its merchandise in 70 locations in Japan, five in Hong Kong and two in Taiwan. Marks & Spencer purchased it in 1987. But M&S, under considerable competitive pressure at home , announced that it would exit continental Europe, sell its U.S. holdings (which also includes Kings Super Markets) and scrap its U.K. catalog business.
Though neither company has confirmed the rumors, either one would seem a good match, given the fact that Saks Fifth Avenue and Neiman's are, along with Brooks Brothers, among America's most well-known upscale retailers. But Saks is still a part of Saks Inc., which canceled plans to spin it off this year because of a reduced market for luxury retailers. And Neiman Marcus, which also owns New York's Bergdorf Goodman, is also facing the threat of a softening economy, which would be bound to hurt the upscale market. On the other hand, some Wall Street analysts have said they believe Brooks Brothers'183-year-old brand name for might be appealing at a time when the trend for more casual clothing in the workplace may be waning. Marks & Spencer, which paid $750 million for Brooks Brothers, said it wanted to seal a deal as soon as possible.
M&S will also close its 38 stores in continental Europe, ending the group's international expansion strategy for now. But the firm will keep its franchise stores in 30 countries and M&S-owned stores in Hong Kong will now become part of that network.