Saks profits fall again - still don't want to hire Faust as head menswear buyer.

[reborn]

From WWD: "Tod’s SpA chairman Diego Della Valle has doubled his investment in Saks Inc. in the past month and now owns 5.9 percent of its common shares."

...unfortunately, that does not mean Saks will actually carry a better selection of Tods and Hogan.

[sbw4224]

Doubled his investment after this nugget of news:

WWD - MILAN — Italy’s Tod’s SpA on Wednesday reported single-digit gains in first-quarter profits and revenues, driven by sales of the Hogan brand and demand for shoes...

[Faust]

Saks Inc. cut nearly $44 million expenses in the first quarter — more than it had previously planned to cut for the full year — and turned in losses that were not nearly as deep as expected.



Losses for the quarter ended May 2 weighed in at $5.1 million, or 4 cents a share, and compared with earnings of $17.3 million, or 12 cents, a year earlier. Results included a $200,000 loss related to the shuttering of Club Libby Lu in January. Saks’ losses for the quarter were much better than the 26-cent deficit analysts had been expecting. Sales fell 26.9 percent to $621.3 million from $850 million.

The firm’s selling, general and administrative expenses fell to $155.4 million from $199.3 million.

Saks said it can cut a total of about $60 million in expenses this year, up from the $20 million to $30 million previously projected.

But the firm, like other retailers, still has excess inventory to contend with this quarter.

“We remain on track to more closely align our inventories with consumption trends by the beginning of the third quarter,” said Stephen Sadove, chairman and chief executive officer.

[reborn]

Saks Inc. cut nearly $44 million expenses in the first quarter — more than it had previously planned to cut for the full year — and turned in losses that were not nearly as deep as expected.



Losses for the quarter ended May 2 weighed in at $5.1 million, or 4 cents a share, and compared with earnings of $17.3 million, or 12 cents, a year earlier. Results included a $200,000 loss related to the shuttering of Club Libby Lu in January. Saks’ losses for the quarter were much better than the 26-cent deficit analysts had been expecting. Sales fell 26.9 percent to $621.3 million from $850 million.

The firm’s selling, general and administrative expenses fell to $155.4 million from $199.3 million.

Saks said it can cut a total of about $60 million in expenses this year, up from the $20 million to $30 million previously projected.

But the firm, like other retailers, still has excess inventory to contend with this quarter.

“We remain on track to more closely align our inventories with consumption trends by the beginning of the third quarter,” said Stephen Sadove, chairman and chief executive officer.

Maybe this means Saks will go back to feeling and looking like a luxury retailer and less like a glorified "Macys."

[Faust]

Xactly. But they'll have to close a dozen of those I would imagine (they have been already). I wouldn't be surprised to see Barneys close a few coops as well.

[reborn]

Xactly. But they'll have to close a dozen of those I would imagine (they have been already). I wouldn't be surprised to see Barneys close a few coops as well.

...I wish Barneys would re-think it's coop retail concept and make it more of what it was in the late 90s: experimental, hard to find, mid priced, funky clothes. What it is now (basically an upscale version of Urban Outfitters) is kinda lame and quotidian.

[Faust]

/\ I think they might have to be forced to do just that. At least the Madison Co-oP has Junya, CDG shirt, Neil Barret, etc. The rest though might just be renamed Scoop.

More on Saks (why do I take sadistic pleasure in seeing them suck? well, the answer is below).

Saks Fifth Avenue is in the throes of more strategic shifts, involving price and product changes and expense slashing.

In the works are merchandising initiatives on the local store level, exclusive lines in collaboration with brands and rejiggering the company’s “good, better and best” brand platform.

“Clearly, there is a cultural change going on, focusing on adapting to this new environment,” Stephen I. Sadove, chairman and chief executive officer of Saks Inc., told WWD. “It involves cost management, controlling inventories and ensuring that strategies are sound for the short term as well as long term. Business is terrible. It’s a tough environment. We feel the team has responded remarkably well.”

For the $3 billion Saks, there’s been no letup in the pressure, as the company on Tuesday reported a $5.1 million loss and a 26.9 percent sales decline, to $621.3 million from $850 million, in the first quarter ended May 2.

Saks’ management remains more focused on fixing the mix. The luxury chain is striving for its “best” brands, the top tier, including Chanel, Jil Sander and Oscar de la Renta, to comprise roughly 25 percent of the mix, down from about a third. (So doing basically the opposite of what a luxury store is supposed to do.)

About 75 percent will be equally divided, more or less, by “better” labels (such as Max Mara and Burberry) and “good” lines (such as Tory Burch and Lafayette 148). These two tiers each represent about one-third of the assortment.

Prices could be down roughly 10 percent for fall and next spring as the chain changes its mix and encourages vendors to implement fabric and style adjustments. (translation, more cheap shit, please!)Sadove cautioned not to assume price cuts will be on existing items from vendors. “We don’t control their pricing. It’s more about changing the mix of product,” he told WWD. “We may be buying a shoe with different fabric or embellishment [and], in some cases, trying to get vendors to offer better price points within the assortment and have more of a range.”

Among shoppers, “We are seeing a trading down in price point, but our customer does not want to trade down brands. They love the brands,” Sadove said during a conference call with Wall Street analysts. “They are valuing brands as much or more than before, but they like the idea of getting lower price points in terms of the brands they like.” (ahh, thanks for actually coming out and saying that your customers are a bunch of consumerist whores - this confession has been long time in the making. Brands, yes, quality, who gives a shit.)

[reborn]

/\ I think the "good-better-best" model is prudent. It expands customer base, and keeps people coming into the store/boutique.

The issue with Saks (and other big box retailers) is the implementation. Essentially they do all of their buying as one entity instead of regionally. Designer denim and bedazzled cashmere sells like gangbusters in LA, but doesn't move in St. Louis (more maybe it does?). For the Good-Better-Best model to work, each price point has to have unique goods, which are not available in the other. "good" merch should not appear to be diluted "Best" merch. I think that's one of the reasons Atelier has not adopted that model. Namely, it's difficult to find lower priced merch that is of the appropriate quality and unique vision that does not look like a knock-off of the "best" merch in the store.

As for Saks I hope this new model or re-adaption of the model helps move the retailer out of the rut it has been in lately.

[Faust]

Nothing will help them, reborn. That store is hopelessly out of touch with the 21st Century. They need fresh blood.

[reborn]

/\ yeah...but the NYC store carries McQueen and I have a $250 giftcard. however out-of-touch they are, I am still going to bag some discount happiness during my next visit the city.

[Sombre]

/\ I think the "good-better-best" model is prudent. It expands customer base, and keeps people coming into the store/boutique.

The issue with Saks (and other big box retailers) is the implementation. Essentially they do all of their buying as one entity instead of regionally. Designer denim and bedazzled cashmere sells like gangbusters in LA, but doesn't move in St. Louis (more maybe it does?). For the Good-Better-Best model to work, each price point has to have unique goods, which are not available in the other.

I agree wholeheartedly with this. Macys, Inc. just discovered appropriating product by local consumer taste. I'm not one to criticize executive compensation, but am I to infer from all this that the highly paid executives had never thought of this? That is beyond asinine. I would have thought differentiating product by geographic region would be one of the first decisions a company would make.

On the "Good-Better-Best" model, I think Saks should scrap it. Like you said, the "good" looks like a knockoff of the "best" (Tory Burch of every decent accessories label). Saks' problem is that it has never properly executed that strategy, and I don't see it spending money to retrain buyers to select more unique items. The store isn't specific enough for that. Actually, all locations outside of the 5th Ave store have been dismal. I've seen more appealing stores in developing countries.

[reborn]

hhahahaha...that line about stores in developing countries was priceless. Is there any love for Saks? I bought my first piece of Helmut Lang (when it was still designed by Helmut Lang) from Saks.

[Faust]

Ok, I'll confess - my iconic Helmut Lang bag is from Saks, I've seen some good Yohji there and they do have an awesome hooded CDG H+ blazer hanging there now. But, when a skivvy 50 year old guy in a gray business suit hands you that blazer, you want to run out of there, discount or not. They have to be more flexible as you point out. Who the fuck wants a guy like that selling you creative fashion?

[Fade to Black]

yeah I dunno what happened to Saks...even in my college vacation days in the mid-2000s to NY, every time I walked through Saks I always left thinking the place felt very, what's the word...moribund.

edit: somebody needs to go in there and make the store Saksy again (sorry i really couldnt help it this time)

[reborn]

/\ yeah...but the NYC store carries McQueen and I have a $250 giftcard. however out-of-touch they are, I am still going to bag some discount happiness during my next visit the city.

Saks, seriously, you need to get your shite together...I was in NYC over the weekend...and as I had planned, I went to Saks for some discount happines, which in this instance came in the form of McQueen zip-up boots. I was stoked because the size and color I needed and wanted were available. The SA reluctantly assisted me in procurring the left boot from the back...I quickly slipped on boots, making sure they were the right size. "I'll take'm." I paid and ambled out. The following day (I took a evening train back to Boston), I wanted to wear my new acquisition...I opened the box, and noticed immediately that the right boot, which I spent most of my time with in the store, was brown. The left boot, however, was a grey-ish olive color. The tard SA mismatched my happiness.

Shame on me for not paying more attention, but Shame shame on Saks for having crappy lighting and aloof SAs.