Mar 12, 2009
Saks hazy on impact of Baugur bankruptcy plan
Mar 12, 2009
Saks Fifth Avenue à New York
* "Don't know" impact of Baugur's bankruptcy plan: CEO
* NY 5th Avenue store most valuable real estate: CEO
NEW YORK, March 12 (Reuters) - Saks Inc (SKS.N) is unclear how a plan to file for bankruptcy from Icelandic investment firm Baugur, which owns Saks' shares, would affect the upscale U.S. department store chain, its chief executive said on Thursday March 12.
Baugur owns about an 8.5 percent of Saks' shares, according to a June 2008 U.S. Securities and Exchange Commission filing.
Baugur said a day earlier that it would file for bankruptcy after a court in Reykjavik refused to extend its protection from creditors. [nLB952853]
"I don't know any more than I read in the paper," Saks CEO Steve Sadove said in response to a question about Baugur at a consumer conference in New York, which was monitored online.
Sadove said he was aware of Baugur's stake in Saks but did not know the consequences of its announcement.
"I really don't know the answer," he said.
Saks has faced a nearly 86 percent drop in its share price in the past year. The company, like other retailers, has suffered a deep decline in sales as even well-heeled customers cut back on spending in the recession.
It operates 51 Saks OFF 5th stores that sell fashion items at lower prices. Sadove said he expects a 5 percent to 10 percent square-foot growth -- or a growth of three to five stores -- in its OFF 5th stores "over the horizon."
The company's flagship store on Manhattan's 5th Avenue, is its most valuable real estate asset, Sadove noted.
"Whatever our market cap is today, its more than the market cap of the company," he said. (Reporting by Aarthi Sivaraman, editing by Maureen Bavdek)
© Thomson Reuters 2023 All rights reserved.