Hudson’s Bay Co., the Canadian department store and owner of Saks Fifth Avenue, is considering buying Kohl’s, Axios said Wednesday, citing sources. The report sent Kohl’s (KSS) shares up about 15% during mid-day trading on Wednesday.
A Kohl’s spokesman said the company’s board of directors will evaluate any potential proposals for its own reorganization plans and “choose a path that it believes will maximize shareholder value.” Hudson’s Bay did not immediately respond to a request for comment.
Kohl’s is the largest department store in the US with about 1,100 stores and $20 billion in annual sales. But the chain’s share price has lagged behind competitors in recent years, and sales have stagnated.
Targeted by several activist investors who are pressuring the company to make sweeping changes, Kohl’s is forced to spin off its e-commerce business or find a buyer to take the entire network private. Last week, Kohl’s said it had reached out to more than 20 potential buyers, indicating strong interest.
Kohl’s has so far rejected takeover bids, claiming they undervalue the company. During last week’s investor day, the retailer announced new growth strategies. Kohl’s will move from “a department store to a more focused lifestyle concept based on an active and casual lifestyle,” said CEO Michelle Gass. But investors weren’t convinced.
Entering the Hudson’s Bay market, which itself went private in 2020, will add a prominent fan base to the ranks of retailers, investment banks and real estate companies that make Kohl’s offerings. If Hudson’s Bay buys Kohl’s, it will tie the chain of luxury fashion stores to the general store.
Hudson’s Bay, which bought Saks in 2013 and also owns Saks Off Fifth and real estate, is a smaller company than Kohl’s. In 2018, the last full fiscal year available to the public, sales were $9.4 billion.