The news for Saks Fifth Avenue just keeps getting worse. The pullback in luxury spending,
unprecedented markdowns and a sharp slowdown at its iconic New York
flagship took a severe toll on Saks Fifth Avenue. This has been the worst year ever in its 84-year
history. Saks Inc. on Wednesday posted a $98.8 million loss in the fourth quarter ended Jan. 31.
However, company executives stressed they’re starting
spring a lot cleaner. Inventories are down 14.6% and are planned to be down 20% moving forward. They also contended
that relationships with designers remain good and vendor terms remain
unchanged, despite catching the ire of the industry for its torrent of
markdowns in the run-up to holiday.
Saks also gave assurances
that the store is not abandoning the luxury business, just
the presentation with its “good-better-best” pricing platform for
luxury products, and that they’re encouraging designers to work on
exclusives, particularly in the bridge zone, which the retailer has
reorganized and renamed Wear.
Stephen I. Sadove, chairman
and chief executive officer, broke from the usual policy of not responding to
industry rumors, which have been swirling like never before, by
dismissing speculation about the possibility of bankruptcy.
have been a lot of rumors, including bankruptcy,” Sadove said during a
conference call with WWD. “Although it is policy not to comment on bankruptcy
rumors, all of the actions [Saks is taking] are ensuring we are free
cash flow positive in 2009. Bankruptcy would destroy shareholder value.
Our intent is to insure and enhance shareholder value.”
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