DOW JONES NEWSWIRES

Saks Inc. (SKS) will offer $100 million in stock, joining dozens of other companies looking to take advantage of increased investor interest in equity and debt offerings during the ongoing market rally.

Shares dropped 6.6% to $6.70 in after-hours trading as the offering will dilute shares outstanding by about 10%. The stock is up 64% so far this year through Tuesday's close.

Saks plans to use proceeds to reduce borrowings under its revolving credit facility and for general corporate purposes.

The luxury retail industry was expected to be less vulnerable to the economic downturn than lower-priced retailers, but luxury brands have seen sales slump amid a broad slide in consumer spending. For its part, Saks has been cutting prices, but steep discounts on designer goods could hurt in the long run as shoppers may be reluctant to paying full price after seeing such big markdowns.

-By Lauren Pollock, Dow Jones Newswires; 212-416-2356; lauren.pollock@dowjones.com