Hudson's Bay Company headed by Mr. Richard A. Baker, is planning to acquire one of the oldest and most revered names in luxury retailing, Saks in a cash deal valued at $2.4 billion.

Real estate major, Baker had acquired department store chain Lord & Taylor in 2006, a move that was looked with doubt at that time. Mr. Baker has been working with the industry not for years and is planning to merge Saks with Lord & Taylor and the Canadian chain Hudson's Bay to create a respectable player in the industry.

The joint entity will create one of the major retail firm and indicate that Mr. Baker to strengthen his position in the retail market. The combined company will own a total of 320 outlets, out of which 179 are full department stores. It had combined revenues of about $7 billion in the 2012 financial year.

Mr. Baker has been developing his retail business since the acquisition of Lord & Taylor in 2006 by investing in store makeovers and left most of the merchandising decisions to members of the staff. The approach has allowed the retailer to bring in flexibility in decision making and helped bring success.