March 30, 2005: Saks has been considering the separation of its upscale Saks Fifth Avenue stores from its moderate department store division, retail investment bankers have said. Saks’ stock jumped on Tuesday after retail industry publication Women’s Wear Daily reported that the company is looking for buyers for its 235-unit department store group, with Belk Inc. as a primary candidate.
While Saks CEO R. Brad Martin is deciding what to do, consumer advocates at Household - HSBC Watch point out that amid predatory lending charges against Household International, Saks and Martin signed an agreement with Household (now HSBC) for private label credit card financing. Martin went on to say “this is a unique opportunity to join forces with one of the most highly regarded, well-established consumer finance companies in the world.” Then Saks had to restate earnings from 1999-2004. Still not finished, on March 3, 2005 Martin’s company announced an informal investigation by the SEC. Exhibiting the same logic as shown in his statement about Household International, Martin then moved Saks market cap backwards. “When the board or directors wakes up they might remove Martin, dump HSBC, and return once again to the days of up scale business” said Household - HSBC Watch.
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In 2005, Belk bought 47 Proffitt’s and McRae’s stores from Saks Fifth Avenue parent Saks Inc. in a $623 million deal. Belk, the largest privately held department store chain in the country, now has 273 stores in 15 Southeastern states and nearly $3 billion in annual sales.