Southeastern Raises Stake in Saks Inc.

Investment fund has elevated holdings to 19.2 percent, up from the 17.8 percent, according to SEC filing.

O. Mason Hawkins apparently likes what he sees in Saks Inc.

This story first appeared in the February 15, 2013 issue of WWD.  Subscribe Today.

Hawkins, whose Southeastern Asset Management Inc. late last year eclipsed both Mexican billionaire Carlos Slim Helú and Tod’s SpA chief executive officer Diego Della Valle to become Saks’ biggest shareholder, has added more Saks shares to his portfolio to elevate the investment fund’s stake to 19.2 percent, up from the 17.8 percent reported to the Securities and Exchange Commission in December.

According to SEC paperwork filed Thursday, Memphis-based Southeastern and its Longleaf Partners Small-Cap Fund affiliate now hold almost 29.6 million shares of the luxury retailer, above the 27 million reported to the SEC in December.

Saks shares Thursday closed at $11.30, up 31 cents or 2.8 percent, putting the value of Southeastern’s entire stake at $334 million. It also implies an $18 million paper profit on the stake held at the end of last year.

The timing of the additional purchases, amounting to about 2.6 million shares, couldn’t be ascertained from Southeastern’s SEC filings.

Hawkins, who has had an on-again, off-again relationship with Saks as an investor dating back to its days as Proffitt’s in the Nineties, is chairman and ceo of Southeastern. Among its other investments is Chesapeake Energy Corp., which added former Saks chairman R. Brad Martin to its board last year.

Southeastern leapfrogged over both Slim and Della Valle in December. Neither of the two other largest investors appears to have increased his stake in the retailer. Slim’s most recent SEC filing, submitted this week, shows his stake static at 23.1 million shares, or 15.3 percent of those outstanding. Della Valle hasn’t updated information about his holdings since Saks reported last April, in its definitive proxy, that he owned 22.7 million shares, or about 14.3 percent. When the proxy was filed, Southeastern held 17.8 million shares, or an 11.2 percent stake.

Saks declined to comment on the investments and calls to Southeastern weren’t returned by press time Thursday.

Southeastern’s filing contained standard language indicating that its purchases have been made in the “normal course of business” and not to pursue or effect a change of control of the company.

Saks is scheduled to disclose fourth-quarter and full-year financial results on Feb. 26. On average, analysts expect it to report earnings of 15 cents a diluted share, down from 17 cents in the comparable 2011 period, on revenues of $966.6 million, 4.5 percent higher than the year-ago level.