Saks to reduce Fifth Ave.
May 3, 2004-- Home Textiles Today,
Without offering too many specific details, Saks Inc. reported, during Lehman Brothers Retail Seminar last week, that it was considering reducing the number of Saks Fifth Avenue units it operates and converting some into any of its department store division nameplates.
"We're doing some comprehensive real estate reviews that may lead to some (Saks Fifth Avenue) store rationalization," said Stephen Sadove, vice chairman and chief operating officer. "I'm not going to commit to any specific numbers, but I wouldn't be surprised if over the next period of time you will see some reduction in the Saks Fifth Avenue store base, and some may become some of our (department store) nameplates."
In other cases, Sadove explained, some units will shut down permanently, depending on various criteria, including economic factors.
During the seminar, Sadove commented on the progress of the company's department store division and its efforts to "build on our sales momentum and become more profitable."
The company is "creating a different type of department store," Sadove said, by creating "more excitement in our merchandise assortments, transforming the shopping experience, reducing pricing confusion and executing effective localized marketing."
A main tactic at accomplishing these endeavors is expanding its offerings of differentiated product.
"This is really what it's all about, in terms of merchandise, from unique vendors, emerging suppliers, exclusive products and proprietary brands," Sadove explained.
This fall, Saks Inc. is opening two department stores under existing nameplates here and in Des Moines that will "epitomize what we feel in our reinvention. It's not only about the categories but that whole feel and look of the stores," he said.
At the forefront of its department store division is Saks Inc.'s Parisian nameplate, which the company is building up as a result of recent and rapid growth.
"We improved our sales and profitability in 2003. It's growing financially at a faster rate than the remainder of the department store business," Sadove said. "It's a business that is performing extremely well, and we do believe it is a model that can roll out into a number of cities."
Parisian, Sadove explained, has a higher level of differentiated product offerings, customer service and a greater number of "better" brands.
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