follow us

Smaller Saks Struggles for Sizzle

Don Hogsett -- Home Textiles Today, March 6, 2006

Birmingham, Ala. —Weighed down by weakness at its flagship Saks Fifth Avenue Stores, Saks Inc. recorded a fourth quarter loss of $2.2 million, compared with a year-before profit of $96.6 million. Operating profit at swank Saks Fifth Ave. was slashed by 86.9%, tumbling to $7.6 million from $58.0 million last year.

Tugging at the bottom line was $56.3 million in goodwill and other charges tied to the earlier sale of the retailer's Proffitt's and McRae's divisions as part of a broad sell-off of its department store holdings.

There was some good news. With the department store sell-off, sales dropped off by 14.2% during the all-important Christmas quarter, to $1.8 billion from $2.1 billion last year — but the crucial gauge of same-store sales climbed 1.9%. Department stores outpaced S5A in operating profit, down 4.0%, compared with the slide of almost 90% at Saks Fifth Ave.

The retailer said it plans to pay out a special $4 per share dividend after completing the sale of its northern department store group to Bon Ton Stores for $1.1 billion and a debt assumption of $85 million.

Saks Inc.

Qtr. 1/28 (x000) 2005 2004 % change
(loss)
a. Fourth quarter results include a $12.9 million asset impairment charge, compared with $2.8 million during the same period last year; a $51.5 million goodwill impairment charge; and a $355,000 loss on the early retirement of debt.
b. 12-month results include a $2.1 million asset impairment charge, compared with $12.1 million a year ago; a goodwill impairment charge of $51.5 million; a $29.4 million loss on the early retirement of debt. Prior-year results included a $156.3 million gain on the sale of stores.
Sales $1,772,823 $2,065,082 -14.2
Oper. income (EBIT) 238,448 315,950 -24.5
Net income (2,242)a 96,640a
Per share (diluted) (0.02) 0.71
Average gross margin 35.8% 36.8%
SG&A expenses 22.4% 21.5%
12 months
Sales 5,953,352 6,437,277 -7.5
Oper. income (EBIT) 662,146 827,159 -19.9
Net income 22,348b 61,085b -63.4
Per share (diluted) 0.16 0.42
Average gross margin 37.1% 37.9%
SG&A expenses 26.0% 25.1%


Fourth Quarter Segment Results

Sales – Qtr. 1/28 (x000) 2005 2004 % change
Saks Department Stores $970,777 $1,225,192 -20.8
Saks Fifth Avenue 802,046 839,890 -4.5
Operating Income – Qtr. 1/28 2005 2004 % change
Saks Department Stores 119,431 124,461 -4.0
Saks Fifth Avenue 7,591 58,037 -86.9


Featured Video

  • Online Moves From Afterthought To Main Thought For Textiles Suppliers

    Camera Icon More Videos

Other Home Furnishings Sites

Casual Living
Gifts and Decorative Accessories
Home Accents Today
Kids Today
Furniture Today