NEW YORK — Saks Fifth Avenue will continue to operate its 100,000-square-foot Mission Viejo Mall store in California, reversing an October 2004 decision to close it.
"After further analysis, we believe that the Mission Viejo store can achieve our profitability standards if appropriate resources are dedicated to this location. We look forward to continuing to serve our many loyal Mission Viejo customers in this beautiful store," Steve Sadove, chairman and chief executive, said in a statement Monday.
Saks said it was sticking to its decision to shut the 47,000-square-foot Palos Verdes store, also in California, which will close on Saturday. The store opened in 1999.
Saks employs approximately 60 associates in the Palos Verdes unit. They will be offered transfers or will receive severance packages.
"This planned closing is consistent with our strategy of focusing our capital, inventory and other resources on our most productive units. We remain committed to our Palos Verdes customers and hope to continue serving them through our other Los Angeles area locations and through saks.com," Sadove said.
The company will record charges primarily related to the lease termination, inventory writedown and severance costs of the Palos Verdes closing. The charges will be recorded in the second fiscal quarter of 2006 and are expected to total about $2 million on a pre-tax basis. Mission Viejo and Palos Verdes are both leased units.
The Palos Verdes store is located in the Avenue of the Peninsula shopping center. The center's general manager, Anton Kotze, said in a statement, "The good news for our customers is, we already have commitments from two well-known retailers for part of the Saks building, and we are currently working on deals for the balance of the space. At the end of this effort, we expect the Avenue of the Peninsula to have an exciting retail mix that meets the needs of our customers."
Saks Inc. operates 55 Saks Fifth Avenue stores, 50 Saks Off 5th stores, saks.com., 38 Parisian units and 60 Club Libby Lu specialty stores. In January, the firm said it was exploring alternatives for Parisian. The goal is to sell Parisian by the end of the year.
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