NEW YORK — The Saks shakeout has finally happened.
After months of turmoil at the department store retailer — ranging from chargeback investigations to speculation over the possible sale of Saks Fifth Avenue — the company on Monday said R. Brad Martin would step down as Saks Inc.'s chief executive officer and be replaced by Stephen I. Sadove, currently vice chairman and chief operating officer. Martin will remain Saks' chairman.
Meanwhile, Fred Wilson, chairman and ceo of Saks Fifth Avenue Enterprises, has been forced out after his job was eliminated.
The company also said Monday that it plans to explore "strategic alternatives" for its $700 million Parisian unit, which could include a sale of the company, and for its $30 million Club Libby Lu division. Saks Inc. said that, as chairman, Martin will focus on this process and "real estate matters."
The management shakeup immediately reignited speculation the Saks board might put Saks Fifth Avenue itself up for sale. Financial investors had eyed a possible bid for Saks Fifth Avenue last year, but the board was said to want too high a price.
As part of the management changes, Andrew Jennings continues as president and chief operating officer of Saks Fifth Avenue and Ron Frasch remains vice chairman and chief merchant. Frasch still reports to Jennings, but Jennings now reports to Sadove instead of Wilson.
The changes at the highest rungs reflect insufficient progress in trying to turn around the Saks Fifth Avenue division, and a bloated, sometimes factious management structure. As Saks Inc.'s assets were sold off last year, the team seemed even more cumbersome and costly.
Other problems have plagued Saks Inc., based in Birmingham, Ala., and the New York-based Saks Fifth Avenue.
Up until recently, the stock price has languished — it closed Monday at $18.71, up 4.76 percent, on the New York Stock Exchange — and is less than half the value it was when Martin took over Saks Fifth Avenue in 1998 and blended it into his Proffitt's regional retail conglomerate, naming the new group Saks Inc. The company had a particularly disappointing second quarter marked by a $42.8 million operating loss, but the third quarter showed improvement with an operating profit of $15.6 million.
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