NEW YORK (AP) -- Shares of Saks Inc., which operates Saks Fifth Avenue, soared to their highest point since 2008 on Wednesday, extending a rally from Tuesday on a news report that the luxury retailer is considering seeking a sale of the company.
THE SPARK: The rally came a day after the retailer reported adjusted results that topped analysts' expectations and that revenue at stores open at least a year climbed a robust 5.9 percent.
This figure is a key indicator of a retailer's health because it excludes results from stores recently opened or closed.
Saks anticipates revenue at stores open at least a year will be up 4 percent to 6 percent for the rest of the year.
But shares surged after The New York Post's online report posted after the close of regular trading that Saks has hired Goldman Sachs to explore strategic alternatives. The options include a possible sale of the company, according to the paper.
The Post reported that Saks will be shopped around to sovereign-wealth funds in the Middle East and Asia. It cited sources it did not name.
Julia Bentley, a Saks spokeswoman, declined to comment saying, "It is our long-standing policy not comment on rumors or speculation."
Michael Binetti, an analyst at UBS, estimated that a private buyer could pay $16 per share for Saks.
THE BACKGROUND: Under its CEO Steve Sadove, Saks has been working hard to update its stores while merging its physical stores with its online business. The company is investing in an ambitious multiyear project with Oracle that will help create a more seamless experience for those who want to shop online and in its stores.
SHARE ACTION: Shares of Saks rose 15 percent, or $2.06, to $15.73 in morning trading on Wednesday. On Tuesday, the stock rose 11 percent to $13.67 in regular trading, and shares climbed even more after 4 p.m. when the Post story came out.
Saks shares had previously traded anywhere from $9.24 to $13.69 over the past 12 months.
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