Saks for Sale?

Speculation is running rampant on Wall Street that Saks Inc. (New York) has hired a banker to explore strategic alternatives, including a possible sale of the company.

According to a report in Women’s Wear Daily, Saks is rumored to have hired Goldman Sachs as its investment banker. A spokeswoman for Saks declined comment, as did a spokesman for Goldman.

Women’s Wear cited some as being convinced that Saks can’t operate very profitably as a standalone company any longer. It would do better by buying another retailer or getting bought by one.

Saks frequently comes up as an acquisition target, with its ties to the luxury market and its famous Fifth Avenue flagship.

WWD suggested that potential buyers could range from equity funds to sovereign wealth funds, such as the Qatari royal family, whose Mayhoola for Investments acquired Valentino Fashion Group SpA last year and is building the Italian fashion brand’s flagship store on Fifth Avenue, just three blocks up from the Saks store.

Interestingly, The Neiman Marcus Group (Dallas), America’s other iconic luxury department store, is also said to be up for sale as its private equity owners – TPG and Warburg Pincus – are rumored  to be exploring a possible initial public offering, eight years after acquiring the company in a $5.1 billion dollar deal.

One investment banker told WWD, “Neiman is asking for about 11 times EBITDA, and Saks would be a more attractive target trading at seven times or eight times that.”

Saks’ top three investors include Southeastern Asset Management (Memphis, Tenn.), Mexican billionaire Carlos Slim Helú and Diego Della Valle, who’s also chairman and ceo of Tod’s Group SpA, the Italian shoes and leather goods company. Those three investors control 49.8 percent of Saks’ outstanding shares.