NEW YORK— Saks Inc. said today it was putting its 40-unit, $700 million Parisian chain on the auction block and named vice chairman and chief operating officer Stephen Sadove to succeed R. Brad Martin as chief executive officer.
Martin will continue to hold the title of board chairman. Fred Wilson, chairman and ceo of Saks Fifth Avenue Enterprises, has resigned and the position he held has been eliminated. President and chief operating officer Andrew Jennings and chief merchant Ron Frasch will remain.
“Martin intends to end his executive and management responsibilities at the end of fiscal 2006,” the company said in a statement. Until then, he will focus on the Parisian sale, Club Libby Lu and on real estate, the company said.
In addition to running Saks Inc., Sadove will take over the management duties of SFAE.
Martin said in a statement: “I approached the board over a year ago about expanding Steve’s responsibilities within the company in conjunction with adjusting my continuing responsibilities.”
Regarding the possible sale of the Parisian stores, Martin said: “There is a very bright future for this unique franchise and…meaningful opportunity exists for continued revenue growth and substantial operating income improvement. Our strategic alternative process could lead to an exciting and independent future for this business, as well as create additional shareholder value for Saks Inc.”
Parisian merchandises brands such as BCBG, Garfield & Marks, Tahari, Robert Talbott, Tommy Bahama, Joseph Abboud, Hugo Boss, Callaway, Cutter & Buck, Trish McEvoy, MAC, Stuart Weitzman, Kate Spade and Ferragamo, among others.
Saks Fifth Avenue, the company’s flagship, has been under investigation by the Securities and Exchange Commission and federal prosecutors for improper vendor chargebacks. An audit committee of the company’s board uncovered improper markdowns between 1996 and 2003 and Saks Inc. has said it will repay vendors about $48 milllion.— Arthur Zaczkiewicz