To Buy or Sell? That's The Question For U.S. Luxury Retailers

Could luxury jeweler Tiffany & Co be a takeover target? Could top-end retailer Neiman Marcus be looking to use its increasingly valuable stock to make an acquisition or see its chairman sell his substantial holding and cash in on the high-flying share?

These are just two luxury retailers that analysts are watching like hawks for any sign of buying or selling as the sector goes through what some are calling a feeding frenzy with uncertainty and rumor the only certainties.

According to investment bankers, both successful retailers and those doing less well could all be looking to get a piece of the action, with the big fish feeling the pressure to buy competitors or, indeed, non-competitors, to boost their business.

Tiffany's, whose share price has been up and down over the past year and is close to its 12-month low, could be a candidate in the latter category, with media reports suggesting that middle-market department stores Nordstrom could make a move for it.

Tiffany's share is trading at around $30 - just above its year-low of $27.10 – and with an improvement in its last financial results this could be the right time for a buyer to move.

Meanwhile, Neiman Marcus stock is close to its 52-week high of $72.82 and up nearly 50 percent since May. With a market capitalization of $3.4 billion, it is in the enviable position of being either a takeover target or being a predator itself which could comfortably gobble up smaller competitors. Either way, events at Neiman Marcus are likely to shake the retail sector up.

Other firms, such as leather goods company Coach, with a fast-rising stock price and excellent Christmas sales, is also under the microscope for any indication that it may be looking to make acquisitions.

Meanwhile, Federated Department Stores is said to be know to be keen to acquire May Department Stores.

Consolidation is clearly the name of the game for the U.S. retail sector and with luxury goods sales steaming ahead, firms selling those goods have the power to sweep up all before them and take their businesses to even higher levels.