BIRMINGHAM, Ala. — With an arsenal of merchandising and marketing ideas that itself deviates from the usual weapons, Saks Inc. is declaring war on department store sameness.
Defining department stores’ biggest challenges as “sameness of product,” “pricing confusion” and “ineffective marketing,” among others, R. Brad Martin, chief executive officer, outlined strategies to rejuvenate business despite a difficult economy at the annual shareholders meeting at Saks Inc.’s corporate offices in Birmingham Wednesday. Martin said new initiatives should help the company meet its long-term goal of 5 to 7 percent revenue growth, and 3 to 5 percent comparable-store sales growth for the next few years.
Saks Inc. will try almost anything to get consumers excited about department store shopping, from nail spas to “personalization shops” to Club Libby Lu stores for “tweens.” While making shopping more experiential and less promotional, the retailer wants to wow consumers with more unique merchandise, from private labels and proprietary brands to unique vendors and environments.
Despite its efforts, business has been difficult for the company. While special items led it to a first-quarter profit of $14.4 million versus a year-ago loss, both its Saks Fifth Avenue and department store divisions had lower operating income as well as lower net and same-store sales during the period, as reported. In May, its comps slid 1.6 percent as department stores were off 0.2 percent and SFA was down 3.8 percent. Its fiscal 2002 sales totaled $5.91 billion.
For the Saks Department Store Group, which includes Parisian, Proffitt’s, McRae’s, Younkers and Carson Pirie Scott, Martin said differentiating product from other department stores is key. Unique merchandise, including private label, has grown to 23 percent of sales from 17 percent in 2002, and is on track to grow to 30 to 35 percent by the end of 2003. The trend is most pronounced at Parisian, where the percentage is 40 percent.
In women’s apparel, the private brand, Relativity, launched in 1998, is now at $100 million in annual sales with strong margins, said Martin. Relativity and Laura Ashley, introduced last fall, will expand to other families of business by year’s end, including special sizes.The department store group is going after the tweens market, with the recent acquisition of Club Libby Lu, a Chicago-based specialty store chain that offers parties and events for preteens. Saks will open 11 mall-based freestanding shops, and will install Club Libby Lu shops in selected stores, with 75 to 100 locations planned over the next few years. Saks also is targeting kids with FAO Schwarz, Zany Brainy and Right Start in-store shops rolling out this year, all with child-friendly environments that include games and interactive experiences.
To enhance the shopping experience for women, nail salons will open initially in six department stores over the next few months — three Parisians and three Proffitt’s/McRaes. Ambience and staff will be hip and European-inspired, and salons will offer consumer-friendly pricing.
“Personalization Shops” — Saks’ attempt to customize product, especially accessories such as handbags, with monograms, photos and other personal touches — will open during the fourth quarter with dedicated space and a centrally trained staff in selected stores.
Martin plans to combat “pricing confusion” among consumers by expanding the “incredible value” program, which presents certain categories, especially private label, as fairly priced and not subject to markdowns. For certain categories and items that also are sold by competitors, Saks has initiated a “we will not be undersold” policy in advertising and signage.
In marketing, Saks Inc. is making a number of bold moves, such as a successful program in Parisian’s Atlanta stores that ran for three weeks in May. As Federated Department Stores’ consolidation of Rich’s and Macy’s brought about four Atlanta Macy’s store closings, Parisian offered customers who owned a Rich’s or Macy’s credit card a $50 Parisian gift certificate just to open a credit account.
“We saw an opportunity to get business from Macy’s customers who were disengaged,” said George Jones, ceo of the Saks Department Store Group, in a postmeeting interview. “We took extreme measures, but it paid off. That’s the kind of creative marketing we want to continue, along with events and gwp [gifts with purchase].”
Jones said Saks will continue to extend existing brand partnerships, such as the Jane Seymour home collection, launching in department stores this summer, and to search for new partners. Jane Seymour home is presented in lifestyle settings with a wide range of product, from bedding to photo frames, and it will be the dominant brand in all of the department stores’ home areas.For the Saks Fifth Avenue division, Martin said that successful in-store leather goods and jewelry salon shops, now in the New York store, will roll out to other locations. At SFA, designer business is improving, he said. Contemporary areas continue to be strong, while bridge remains soft.
Saks Fifth Avenue will open new stores in Richmond, Va., this fall, and Raleigh, N.C., in Sept. 2004.
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye