And the only businesses that would get any benefit from that would be competitors such as Nordstrom Inc., Macy's Inc., Bloomingdale's and Barneys New York Inc., the analyst added.
Also, Steven Dennis, president of SageBerry Consulting LLC and a former executive and current shareholder of Neiman Marcus, said Saks' real estate portfolio would weigh against a Neiman combination because of the limited use for many of the locations if they were closed.
On paper, Saks looks like a decent buyout candidate, with an enterprise value as a multiple of Ebitda of 9.5, and low debt, even at its current stock price of $15.52, up about 13.5% Wednesday after the news about a potential sale broke.
Ebitda as of May 4 was nearly $266 million, cash was $20 million and total debt was $317 million. Its market cap was $2.24 billion, with an enterprise value of nearly $2.54 billion.
But Dennis said that at 9.5 times Ebitda, Saks is now becoming expensive enough to give potential buyers pause, particularly because Saks is a fairly mature brand.
Saks is often viewed by analysts as the dowdy rival to sleeker, hipper and better-operated competitors such as Neiman Marcus, Nordstrom, Bloomingdale's and the ultra-cool Barney's.
All the chatter about a sale of Saks comes against a backdrop of a bull market and luxury goods space, leading some to wonder whether the sector is reaching its peak in terms of sales, growth and valuation.
Results this reporting season have "shown the negative relationship of inventories to sales growth for all companies other than Macy's," Credit Suisse analyst Michael Exstein said in a note Tuesday. "Saks putting itself up for sale may be another indication that we are getting closer to a cyclical peak for some retail stocks." -- Written by Richard Collins in New York
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV