NEW YORK - Shares of Saks Inc., which operates Saks Fifth Avenue, slipped Friday amid a report that an Icelandic investor is no longer pursuing an acquisition of the luxury retailer this year.
| SKS | 5.55 |
Shares of Saks fell 8 cents to $11.19, near the low end of its 52-week range of $23.05 to $9.15 per share.
The New York Post said Jon Asgeir Johannesson, chairman of Iceland-based retail conglomerate Baugur Group, had been interested in buying the company--but that a person close to the investor that it did not identify said that tight credit markets and a challenging economic outlook made the financing difficult at current prices.
According to the report, the person said that the recent cut in Saks' forecast for Ebitda, or earnings before interest, taxes, depreciation and amortization, has reduced potential returns on a leveraged purchase.
On Aug. 19, Saks reported a wider-than-expected loss for the second quarter and delivered a downbeat outlook as its high-end shoppers pull back. The company said it expects its 2008 operating margins, excluding certain items, to decline from 2007 levels. It also expects same-store sales, or sales at stores open at least a year, to be anywhere from unchanged to down by low-single digit percentages for the second half of the year. Same-store sales are considered a key indicator of a retailer's health.
Fergus Wylie, a spokesman for Baugur, declined to comment on the Post report. Saks officials couldn't be reached immediately.
In Britain, Baugur has stakes in such retailers as department store House of Fraser and fashion chains Karen Millen, Oasis and Warehouse, Woolworths Group and department store company Debenhams. It also owns London toy store Hamleys.

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