Saks Fifth Avenue’s CEO on What’s Ahead
Saks Fifth Avenue is “cautiously optimistic” for fall, when the luxury retailer will relaunch saks.com, reinvent the holiday window experience at the Manhattan flagship, and advance clienteling efforts.
Those were among the initiatives cited by Saks’ president and chief executive officer Marc Metrick, in a sanguine letter to vendors, a copy of which was obtained by WWD.
Metrick has been regularly updating vendors on Saks, providing his perspective on the state of the business, its recent performance and upcoming initiatives. Given the unprecedented challenges posed by the world health crisis, it’s particularly necessary for retailers to communicate with vendors for planning purposes. Still, since Saks’ parent company, the Hudson’s Bay Co., went private last March, quarterly sales and profit results are no longer publicly reported, making it hard for the vendor community to get a read on how Saks and its sister divisions — Saks Off 5th and Hudson’s Bay in Canada — are performing. By going private, HBC no longer has to worry about short-term performance to appease financial markets and can expedite changes geared to improve the business for the long term.
The last set of figures released were for the third quarter of last year, when sales tallied 1.82 billion Canadian dollars, down from 1.86 billion Canadian dollars a year ago, with a 1.7 percent comparable sales decrease. Earnings before interest, taxes, depreciation and amortization declined to 40 million Canadian dollars from 84 million Canadian dollars a year earlier.
Coincidentally, Geoffroy van Raemdonck, ceo of the Neiman Marcus Group, also sent a letter to vendors this week, though its tone was somewhat different. Van Raemdonck wrote that significant staff cuts in the store fleet as well as at the restaurants and bars in the stores are occurring. NMG emerged from Chapter 11 bankruptcy proceedings on Friday, in a stronger financial position.
Neiman’s and Saks will be slugging it out this holiday season, which considering the precarious state of retailing and luxury amid the pandemic, seems even more consequential than past ones.
“Despite a majority of the fleet being closed for part of the second quarter, business performance exceeded expectations, demonstrating the success of our strategic shifts,” Metrick wrote. “Online sales outperformed our forecast from the onset of the pandemic and continued to pick up as stores reopened, increasing double digits during the second quarter compared to the previous year.”
The Saks Fifth Avenue stores reopened in June and July, and exceeded projections, only running slightly below the same period last year, Metrick said.
“Men’s continued to be a top-performing category across channels driven by footwear, followed by women’s shoes, handbags and jewelry, as well as fragrances, which experienced particularly strong demand online,” Metrick wrote.
He also indicated that some new services, including off-hours, virtual appointments and same-day delivery to the Hamptons, were well received, and that Saks has been attracting younger and more diverse customers. He did not disclose any sales or profit figures.
Saks.com will be relaunched next month, with an updated look and feel, improved functionality for easier shopping, options to search for items based on availability online, in store, for same-day delivery and to pre-order. The web site will also provide “tailored product recommendations, curated editorial content and a significantly expanded ‘Edit’ section, and segmented homepage tabs for women’s and men’s.”
Store hours are being adjusted, stylists will focus more on clienteling and they are being enabled with improved analytics for more personalized customer interactions, according to Metrick.
The Fifth Avenue flagship’s holiday windows will shift from a single launch event to a 20-night celebration that will be livestreamed and on social media.
“Looking beyond the fall season, we’re making progress on our growth strategy, which we call ‘Luxury Disrupted,’” Metrick wrote. It revolves around offering “the most distinct, curated and powerful fashion assortment” and a shopping experience “living up to our promises of personalization and ease.”
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