Saks Inc (NYSE:SKS) shares rose as much as 18 percent in after-hours trading after it was revealed that the company hired Goldman Sachs to look into a possible sale. That’s according to a report by New York Post writer James Covert.
Potential Buyers For Saks
Saks apparently is interested in other strategic options outside of a sale as well. According to Covert, the retailer’s flagship store on Fifth Avenue in Manhattan may be worth over $1 billion by itself.
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Bidders for Saks Inc (NYSE:SKS) are expected to be large private equity firms. KKR and Leonard Green & Partners were named specifically in Covert’s report as likely bidders for the retail chain.
There was little other information contained in the report. Specifics are decidedly slim on the subject at this point, but Saks shares have been rising steadily throughout the day because of the chain’s latest earnings report.
Saks Surprises With Latest Quarterly Results
Shares of Saks Inc (NYSE:SKS) rose 11 percent during the regular trading day on Tuesday thanks to the company’s positive earnings report today. The luxury retail chain’s first quarter profits were in line with expectations, and its revenue was ahead of consensus.
Same store sales rose 5.9 percent during the quarter, compared to Wall Street’s expectations of 2.6 percent. The chain also said it would launch an ecommerce site this year instead of waiting until next year.
Of course while those results are better than expected, in most cases the results alone wouldn’t be enough to push shares of Saks as high as they did during the regular trading day. With today’s gains during the regular trading day, the company’s stock hit its highest level in over five years.
Barron’s contributor Sam Mamudi pointed out that as of the end of April, 32 percent of the company’s float was held in shorts, which means the positive results may have convinced some of those short sellers to buy shares to cover themselves.