Hudson’s Bay reportedly approaches Macy’s about a takeover
A blockbuster deal in retail could be on the horizon. Or not.
Canada’s Hudson's Bay Company has approached Macy’s about a takeover, reported The Wall Street Journal, citing people familiar with the matter.
The talks between the companies are in the early stages and could lead to something other than an acquisition, according to the Journal, such as a deal for Macy’s real estate, which could be valued at roughly $14 billion. The talks could also go nowhere.
In addition to its namesake department store chain and Home Outfitters home décor business, Hudson’s Bay’s retail portfolio includes Saks Fifth Avenue and Lord & Taylor, and the 80-store Galeria Kaufhof in Germany. The company is headed up by veteran retailer Jerry Storch, the former CEO of Toys “R” Us.
Hudson's Bay would face some challenges in absorbing Macy’s. Before its stock spiked on news of the deal, Macy's market capitalization was nearly $10 billion, while Hudson's Bay was about $1.7 billion, CNBC said. Macy's also has a significant amount of debt about $7.5 billion, according to the Journal report.
Home decor retailer lowers guidance on weak Q4
Kirkland’s same-store sales fell in the fourth quarter amid weak traffic early in December.
The home décor chain reported that its net sales for the 13 weeks ended January 28, 2017, increased 2.1% to $203.2 million compared to the year-ago period. Same- store sales for the quarter, including e-commerce sales, decreased 4.6%.
"We were not immune from the broader trends impacting much of the retail industry during the fourth quarter," said Mike Madden, president and CEO. "Trends proved to be more difficult than we anticipated as strong sales on Black Friday were offset by weak pre-holiday traffic in December, and improved post-holiday sales were not enough to overcome December's softness. On a more positive note, we experienced another quarter of double-digit growth in our e-commerce business, and we managed operating expenses and inventories well throughout the season."
The retailer said it remained confident about its long-term outlook, noting that it entered 2017 “with inventories on plan and a strong balance sheet.”
“We've enhanced our management team, and we're focused on improving our pricing and promotional mix, merchandise assortment composition, marketing execution, and in-store experience as part of our long-term strategy,” said Madden.
Based on the fourth quarter sales results, Kirkland's now expects full year 2016 diluted earnings per share in the range of $0.56 to $0.61, compared with its prior guidance of $0.70 to $0.75 per diluted share.
Kirkland’s operates 398 stores in 36 states.
Gap in augmented reality dressing room pilot
Gap is testing an augmented reality app that lets shoppers "try on” its apparel without ever entering a store.
The app, called DressingRoom by Gap, lets customers virtually try on merchandise via their smartphone, according to a report by PSFK. It uses Avametric technology backed by the Google Tango platform and ASUS hardware.
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