Saks Inc (SKS), Target Corporation (TGT): Acquisitions Driven by a Weak Market

There are still winners
With that difficulty, it’s easier to see why funds are interested in picking up the higher-end brands. While Saks Inc (NYSE:SKS) was suffering further down the balance sheet, as noted above, much of that suffering was imposed by the company’s weaker locations. Those stores in failing malls have been too expensive to shut down, so they’ve simply been a drag on margins. Hudson’s Bay owns the Lord & Taylor brand, which can potentially switch into some of those weak locations. In short, the synergy between the two companies made it a great buy.

Neiman is more straightforward. The business has been growing nicely, and the current owners will make about $1 billion on the sale. Growth in retail continues to be weighted toward the high end. While acquisitions have been in the spotlight, I would also be on the lookout for new entrants to the market. Handbag designer Tory Burch, in particular, is rumored to be eyeing an IPO and the timing could hardly be better. Look for that move in the next six months.

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Fool contributor Andrew Marder has no position in any stocks mentioned, and neither does The Motley Fool.

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