NEW YORK — Saks Fifth Avenue said Monday that it has decided to close its Palo Alto, Calif., location.

The company is looking for a new tenant for the store. In the meantime, it will convert the store into a Clearinghouse, Saks’ clearance center format.

The company told the 150 employees of the store of its plans to close the store once a new tenant is found.

Philip B. Miller, chairman of Saks Fifth Avenue, said the announcement was the result of an ongoing review of store operations.

“Our objective is to ensure that our assets are deployed in markets with an excellent potential for growth,” he said. “As part of this process, we recently expanded our stores in Boston, Atlanta and Troy, Mich. We are also in the process of building a new store in Short Hills, N.J., and expanding our store in Beverly Hills.”

Saks operates Clearinghouse stores in Philadelphia, Gurnee Mills, Ill., Prince Williams, Va., and Sunrise, Fla., and said it plans to open five more.

To prepare for the conversion, the Palo Alto store will be closed on Wednesday. It will reopen with a storewide clearance sale on Thursday. All merchandise except cosmetics will be marked down and additional merchandise from other Saks locations will be brought in.

The 62,000-square-foot Palo Alto store, one of five anchors in the Stanford Shopping center, opened in 1962.

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