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Saks Closing in Skokie, Ill.

The Saks Fifth Avenue store in Skokie, Ill., and its lower-level Off 5th outlet will close in July, as the retailer weeds out weak locations.

NEW YORK — The 72,000-square-foot Saks Fifth Avenue store in Skokie, Ill., and its lower-level 33,000-square-foot Off 5th outlet will both close in July, as the company continues to weed out weak locations and shift resources to flagships.

More closings are expected. Estimates from retail experts range from just under 10 to up to 15 regular-priced stores that ultimately could be closed. The parent company, Saks Inc., does not comment on potential closings. The timing of any closing announcement depends on agreements with landlords.

Since October, the Saks Fifth Avenue division has announced 11 closings, including Skokie.

As Saks seeks to raise sales productivity and margins, and work off lower inventories, additional Off 5th outlets also are expected to close.

Saks Fifth Avenue currently operates 57 stores and 52 outlets, as well as saks.com. The top 10 flagships are in Manhattan, Boca Raton, Fla., Atlanta, Beverly Hills, San Francisco, Chicago, Dallas, Boston, Miami and Houston, and several are getting beefed up this year, with the corporation pumping about $150 million into capital improvements.

Some other top stores are in Bal Harbour and Palm Beach, Fla.; Tyson’s Corner and Chevy Chase in metro Washington, and Troy, Mich.

A massive renovation project at the Fifth Avenue flagship in New York, the details of which were expected to be disclosed last fall, is on hold. The company has been distracted by government investigations regarding alleged improper collections of vendor allowances at Saks Fifth Avenue and accounting procedures related to the timing and the recognition of the allowances, as well as management changes.

The Skokie store, opened in 1978, has long failed to meet expectations and was downsized to include an Off 5th in 2003. Both units are leased.

“They should have closed this store many years ago. A lot of designers want to get out, and it’s been in dire need of renovation,” said a retail source. “Saks’ biggest dilemma is that it has too many stores, and the focus got off the flagships. They have been trying to run a Saks image across the chain, but with a limited budget. The dollars were spread too thin. Neiman’s has been much more focused.”

This story first appeared in the May 27, 2005 issue of WWD.  Subscribe Today.

Saks Fifth Avenue stores in downtown Chicago and Highland Park in suburban Chicago reportedly took business away from the Skokie site.

Fred Wilson, chairman and chief executive officer of Saks Fifth Avenue Enterprises, said in a statement, “This announcement is consistent with our strategy of focusing our energy and resources on our larger and more productive units. We remain very committed to metropolitan Chicago, and we will be able to enhance our merchandise assortments and service offerings at both our flagship Saks Fifth Avenue Michigan Avenue store and our Highland Park location in order to better serve our many loyal Chicago-area customers.”

Two other Off 5th outlets in metropolitan Chicago, at Gurnee Mills and Woodfield Village, will stay open.

According to the company, 70 associates are employed in the Old Orchard Saks Fifth Avenue and 50 are employed in the Off 5th location. They will either be offered transfers or will receive severance packages.

Saks Inc. also operates the 232-unit Saks department store group. Last month, the company struck a deal to sell to Belk Inc. 22 Proffitt’s stores and 25 McRae’s stores, making up the southern group of department stores. The company is also seeking to sell its northern group of department stores, which includes Carson Pirie Scott and Bergner’s, among other nameplates.