NEW YORK -- Saks Inc. named Stephen I. Sadove, former senior vice president of Bristol-Myers Squibb Co., vice chairman of the company, confirming a report in these columns Monday.
Sadove is responsible for Saks Inc.'s strategic and operating plans, performance management, and the identification and cultivation of brand extensions and new business opportunities. He reports to R. Brad Martin, chairman and chief executive officer of Saks Inc.
Both Christina Johnson, president and chief executive officer of Saks Fifth Avenue Enterprises, and George Jones, chief executive officer of the Saks Department Store Group, report jointly to Martin and Sadove.
Martin stressed that Johnson's role at Saks Fifth Avenue is unchanged. "I'm thrilled with Tina. She's a wonderful partner. Steve's addition is as a member of our corporate staff," he said.
Sadove, 50, will continue to serve on Saks Inc.'s board, a post he has held since September 1998. Sadove also served on the board of Saks Holdings Inc. from 1996 until its September 1998 merger with what was then Proffitt's.
His last day at Bristol-Myers Squibb was Friday and he started at Saks Monday. He maintains offices here and in Birmingham, Ala., Saks Inc.'s corporate headquarters.
"Having served on the board of Saks Holdings and Saks Inc., I have been involved with the shaping and direction of the company," said Sadove.
In an interview with WWD, Martin said, "Steve will be a corporate official, serving with me on the corporate staff and working with the corporate executives. He's a valued member of our board, and he has great brand-building experience. I was looking to bring a consumer products and brand-building executive to the team and transfer some of my responsibilities to him and gain a consumer products brand-building perspective."
Among the duties that Martin will hand over to Sadove are the oversight of the corporation's budget and its annual strategic and operating plan.
Sadove, a long-time beauty executive, said he brings to the Saks team "brand building, leadership, culture development and strategic planning." He said that he's experienced in building brands, and that Saks Fifth Avenue, "which is already a strong brand," has opportunities for growth, as do some of the department stores."I've run a large company, and there's an enormous amount of parallels in terms of what's required," said Sadove. "It's not dependent on having a retail background to develop people and an organization. In the beauty and retail industries, a lot of the skill sets are comparable. It's getting people working together."
Sadove pointed out that he will concentrate on the internal operations, while Martin will focus externally. "I'll play a large inside role, and be responsible for delivering the operating and strategic plans of the business. Brad will work with analysts, investors and suppliers."
Sadove added that he likes the challenge of joining Saks Inc. during a difficult retail environment.
"It excites me. When I joined Clairol in 1991, it was declining by double digits, and we tripled the size of the company. I look at it as an opportunity. I'd rather go into a tough retailing environment and find those opportunities for growth."
Reached for comment, Christina Johnson said, "Steve will help us in many respects, such as new business development and new opportunities for the brand. He'll play a very big role in marketing, human resources and strategic planning."
With a career spanning over 25 years in marketing and consumer products, Sadove held various positions of increasing responsibility at General Foods USA, including executive vice president and general manager of the desserts division. He joined Bristol-Myers Squibb in 1991 as president of Clairol. In 1994, he was appointed worldwide president for Clairol, overseeing the brand in the U.S., Canada, Europe, the Mideast, Africa and Latin America. In 1996, he was named president of Bristol-Myers Squibb Worldwide Beauty Care, with responsibility for Clairol Worldwide and Matrix Essentials. In 1997, he was named president of Bristol-Myers Squibb Worldwide Beauty Care and Nutritionals, adding Mead Johnson Nutritionals to his duties.
"During his tenure at Bristol-Myers Squibb, Steve led Clairol to become the number-one hair care business in the U.S., relaunched the Herbal Essences brand -- which is now a $700 million business -- and most recently completed the sale of the beauty care business to Procter & Gamble for approximately $5 billion," said Martin.Saks Enterprises operates 62 Saks Fifth Avenue stores, 51 Saks Off 5th stores, and Saks Direct. The Saks Department Store Group operates 41 Parisian specialty department stores and 203 traditional department stores under the names of Proffitt's McRae's, Younkers, Herberger's, Carson Pirie Scott, Bergner's and Boston Store.
Sadove joins Saks at a critical time. The company has been hurt by a slowdown in the luxury sector and a highly promotional retail environment. Last winter, Saks Fifth Avenue aborted its planned spinoff from its parent.
Saks Inc. will report its December sales results on Thursday, and Martin declined to comment on those results until then.
"We're constantly trying to get better at what we do in every aspect of this business," said Martin. "The company weathered the difficult storms of the second half of 2001, and our corporations [SFAE and SDSG] are all positioned for an outstanding 2002."
As reported, the company in November recorded a third-quarter loss three times that of the previous year, but earnings per share were a nickel ahead of Wall Street's expectations. Results for the third quarter were uncharacteristically propped up by its department store group, while the upscale SFA division showed signs of its heavy exposure to the depressed New York climate and luxury environment. Net loss widened to $21.8 million, compared with the year-ago deficit of $8.2 million. Sales fell 9.2 percent to $1.42 billion from $1.57 billion a year ago, on a 7.3 percent drop in comparable-store sales.
In October, as reported, Saks Inc.'s debt was placed on review for possible downgrade by Moody's Investors Service. Last August, the bond-rating agency took Saks's senior implied debt rating down a notch to Ba2 -- two steps below investment grade -- due to poor operating performances at the department stores and Saks Fifth Avenue. According to a Moody's statement, Saks is "more highly leveraged than a number of its competitors and its debt protection measures are therefore impacted disproportionately by lower sales and related markdowns."
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