Saks Inc. (New York) might be facing a downgrade in its Standard & Poor's credit ratings as it seeks a buyer. S&P said any deal will likely add a substantial amount of debt to the luxury retailer.
S&P rates Saks at BB, or two levels into junk territory, and placed those ratings on watch for downgrade yesterday. S&P expects to resolve the watch on Saks' ratings in the next three months. If no deal occurs within that time frame, S&P said it would make a determination on the ratings based on the company's current management team's business strategy, financial policies and capital structure.
Though no deal has yet been announced, Saks recently tapped Goldman Sachs Group Inc. to explore strategic alternatives for the company. Several suitors’ names have been mentioned, including The Hudson’s Bay Co. (Toronto), the Qatar Wealth Fund and, most recently, Starwood Capital Group LLC (Greenwich, Conn.).