Saks will test a new format for its Off 5th outlet chain as speculation mounts that a takeover bid by Baugur is imminent.

The New York department store group is poised to open the 26,400 sq ft new-look store on April 15 in Orlando, Florida, replacing its existing 21,000 sq ft outlet there.

Saks said its prototype for Off 5th will be “luxury in a loft environment” and that the design will maximise flexibility and enable rapid remerchandising. It will provide a model for its 47 other outlet stores.

Off 5th president Robert Wallstrom said: “A lot of thought and care went into the design of this store. We believe there is a meaningful new store growth opportunity for Off 5th.”

US industry observers believe the move signals a change of strategy by the luxury group in the face of faltering consumer demand in department stores.

However, according to US reports, Icelandic investor Baugur, which has a 9 per cent stake in Saks, is unfazed by the dampened US economy.

The Wall Street Journal reported that Baugur is ready to make a move on the retailer, possibly following its full-year results in February. It has hired investment bankers at Financo in New York and is expected to offer no more than US$23 (£17) a share.

In October, Baugur said it may make a joint bid for the department store group with Landmark Group of Dubai.