Saks Fifth Avenue‘s flagship store was recently appraised at $1.6 billion USD, as stated in a filing by its parent company, Hudson’s Bay Co. This valuation is approximately a 60 percent drop from where it was at $3.7 billion USD five years ago. The company says the low appraisal was based on “the performance of the store relative to expectations in 2014, changes in market rents on New York’s Fifth Avenue, and the changes in the retail landscape.”
Hudson’s Bay went private at a valuation of $1.45 billion USD last month as part of a deal created by chairman Richard Baker. Baker’s plan has been to revive Saks’ performance, but shareholders have mixed feelings regarding the flagship building’s value. The company that conducted the appraisal noted that the value of the flagship store property would drop if Hudson’s Bay moved forward with a redevelopment plan. According to Business of Fashion, Hudson’s Bay is already pouring $279 million USD into the store in order to upgrade its handbag department.
The company also recently entered a deal with competitor Authentic Brands to license the Barneys New York name to Saks Fifth Avenue – a partnership that will reportedly see Barneys pop-up shops enter Saks locations.
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