By  on October 15, 2007

Saks Inc. could be getting ready to entertain suitors.

Sources indicated that the luxury retailer is opening the door to the possibility of a sale and may even have at least two interested buyers.

Financial and industry sources said the $2.9 billion firm has changed its sentiment about considering offers, and two weeks ago was approached by at least one entity trying to float the idea of an acquisition.

Saks has received inquiries, and even offers, before. It has turned them away, saying the company is focused on its turnaround initiatives. Recently, however, the operations of the luxury retailer have progressed to the point where it could bring a higher price than what was on the table two years ago. And that, the sources said, explains why the company would be willing to at least look at an offer.

In August, Saks narrowed its net loss in the second quarter to $24.6 million, or 17 cents a share, from $51.9 million, or 39 cents, the previous year. Same-store sales rose 13.2 percent in the quarter, and total sales increased 14.9 percent to $694.1 million from $603.8 million.

Stephen I. Sadove, Saks' chairman and chief executive officer, said at the time of the second-quarter results that "clearly we are less productive than some of the competition, such as Neiman Marcus. We have a lot of catching up to do, but the way you catch up is through outsized comp-store growth."

Analysts said at the time that the quarterly results showed that Saks' turnaround efforts were working.

Shares of Saks were up 3.4 percent Friday to close at $18.05 per share. The stock's 52-week high is $23.25, and the low is $14.38. It's unclear what potential bidders would pay for the retailer. But recent pretax multiples have remained high, about 7 percent. Saks' market capitalization is $2.6 billion, and the company has an enterprise value of $3 billion, according to Yahoo Finance.

A spokeswoman for Saks declined comment.

A source close to Saks said that certain individuals at the retailer are "open to any [deal] that makes sense." The source also said the company is doing fine and doesn't need to sell immediately, but added that waiting another two or three years wouldn't make sense considering the current economic backdrop.

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