New York, March 31--Shares of Saks Inc. soared nearly 8 percent Wednesday amid a published report that said the department store operator plans to keep its Saks Fifth Avenue division and is lining up buyers for its regional mid-price department store group.
Speculation has been mounting that Saks had planned to spin off its two divisions. But Women's Wear Daily, a trade publication, reported Wednesday that the Birmingham, Ala.-based company plans to keep its Saks Fifth Avenue store, and sell its 230-plus regional division, which operates such stores as Parisian, Proffitt's, Younkers and McRae's.
WWD reported that Belk Inc., a regional department store chain based in Charleston, N.C., as well as two private equity firms, Blackstone Group and Apollo Advisors, are interested in the regional store division.
Blackstone spokesman John Ford declined to comment. Officials at Apollo Advisors and Belk could not be reached for comment. Julia Bentley, a spokeswoman at Saks Inc., declined to comment.
The splitting of Saks Fifth Avenue from Saks department stores would undo a 1998 merger of Saks Fifth Avenue with Proffitts Inc., which aimed to upgrade its store portfolio. But the combination hasn't exactly helped create big cost savings, resulting in disappointing earnings. For the year ended January 29, Saks Inc. earned $60.9 million, or 42 cents per share, compared to net income of $80 million, or 56 cents per share in the year-ago period.
Shares of Saks rose $1.18 to close at $16.55 per share on the New York Stock Exchange.
