NEW YORK — There’s a new main attraction in Midtown.
Saks Fifth Avenue’s main floor has been transformed into a formidable presentation of luxury leather goods and accessories anchored by large prestige designer shops and an imposing Rem Koolhaas-designed dichroic glass escalator up to the beauty floor. And there’s plenty of elbow room, for a change.
Chanel, Prada, Bottega Veneta, Fendi and a soon-to-open Celine shop are all prominently situated right off the Fifth Avenue entrance, and deeper in, there’s the first in-store presentation of Moynat, a French brand; Louis Vuitton’s new concept shop; Dior; Balenciaga, and an array of designer exclusives — over 100 — identified by discrete “Only At” Saks signs.
The expansive, 53,000-square-foot main floor of the 646,000-square-foot flagship triples the handbag department’s selling space. There are just over 50 brands, including 14 new to the store. Manning the floor are 20 “service advisers” to guide shoppers through the store and 50 “style advisers” with product knowledge across multiple brands.
The unveiling of the new main floor this week culminates four years of reimagining and rebuilding much of the Fifth Avenue flagship, and is the most dramatic statement yet of the intent at Saks, as its executives say, to sharpen the retailer’s image, project a “new luxury” and create an immersive experience.
The flagship, located between 49th and 50th streets, accounts for about 20 percent of Saks’ total volume and four years ago was appraised at $3.7 billion, well above the $2.9 billion that the Hudson’s Bay Co. paid for all of Saks the year before. The renovations could further raise the value of the site.
“We needed to stand for something,” Marc Metrick, president of Saks Fifth Avenue, told WWD.
“If you looked at brand perception, Saks didn’t stand for anything specific. We were right in the middle,” Metrick said. “Some brands stood for fashion, some brands stand for service, some brands stand for a great or cool environment. While Saks was not necessarily bad at anything, it wasn’t known for anything except for being this icon. This luxury store that’s been around a long time. There is a lot of choice out there. We decided we are going to be a fashion authority and elevate the Saks brand and make Saks ‘the’ luxury player in the United States. You can’t just do that by buying product. Luxury is everywhere. You have to have an assortment that means something. You have to tilt the assortment toward fashion. You can’t just buy safe. You have to take risks.”
“This is a significant milestone,” added Tracy Margolies, Saks’ chief merchant. “It’s not just a renovation. It’s a redevelopment. It’s a bold move for us. We’ve really gone after being that fashion authority.”
Except for the original columns dating back to the 1924 opening of the flagship, the new main floor is virtually unrecognizable from the main floor from before. It’s spacious, aisle-free, with visibility clear across the floor. That stately, woodsy, walled-off, tight feeling of the past is gone. A different kind of elegance, crisp and modern, now permeates the space.
Above the escalator, there’s a 60-foot by 20-foot LED large-scale multimedia display with changing graphics. Below, opaque Italian terrazzo floor and folded metal origami-inspired fixtures offset the white walls and columns. The escalator, while prominent, doesn’t overwhelm the floor; it beckons visitors up to the new beauty department on two.
Later this year, the escalator will extend down to the lower level, where ultra-fine jewelry will be housed in a 15,000-square-foot setting branded as The Vault. Before, it was utilized for beauty product storage, which has been relocated offsite.
The east side of the main floor will reopen late this summer with sunglasses, travel products, contemporary handbags and additional designer handbags. There will be a souvenir shop, called SVNR, selling New York City-inspired totes, umbrellas and other Saks-branded products.
On nine, the Philippe Starck-designed, Art Deco-inspired L’Avenue restaurant and bar from Paris, offering fusion French-Thai fare, just opened. Some VIP guests said the prices were high, but Saks officials said the pricing is a work in progress.
“We’d like you to go through the store and shop but this is stand-alone restaurant, a destination, with panoramic views of Fifth Avenue, Rockefeller Center, St. Patrick’s Cathedral,” Metrick said. “It’s on two levels. It seats 375. It has its own entrance off East 50th Street,” with an express elevator to the restaurant.
As Metrick suggested, department stores have always wanted to accommodate customers with places to eat, but more so as an amenity to, or break from, the shopping.
“This is totally different,” Metrick emphasized. With L’Avenue, “I actually wanted to build a place for people to come to eat. L’Avenue is at the intersection of fashion and fine dining.”
Since 2015, the Saks flagship has undergone sweeping change. Ready-to-wear was consolidated from four to three floors, the designer level on three was redone and the Collective for lifestyle merchandising and hot trends and The Advance department presenting a mix of art and avant-garde designer fashion both debuted on five. Beauty on two opened last May and there is a jewelry department on two as well.
“Our Fifth Avenue flagship is the beacon of what we stand for and what we do,” said Metrick. “We need to build the Saks brand so people see it as luxury, and how do you do that? You build it with experiences. You do that with key partnerships and events, like our ‘International Best-Dressed’ event with Vanity Fair, or doing Met Gala windows with Vogue.
“We really started to build a brand into something other than a place to get other people’s brands. We elevated our service. We used to be very transactional. We have really started to build a true clienteling sales force like any high-touch business. Like luxury real estate. You nurture people over the years. We are much more relationship-driven. We needed to build a much different sales force. Call that the new luxury, a new way of selling.”
There’s more to it, Metrick mentioned. “When you think about department stores, for years it was all about who had what brands exclusively. Meanwhile, the customers wanted fashion. I might have a brand, but if I didn’t have fashion inside the assortment, if I bought all black, if I didn’t take risks, I wasn’t going to get the credit anyway.”
Among Metrick’s main points during the interview:
• The flagship transformation and efforts to distinguish the merchandising stems from research with customers from five years ago. “It’s all informed by the customer, instead of us deciding.”
• The combination of putting beauty on two and luxury leather goods on one will be more productive than the way it was before.
• Saks is transforming itself from the “transactional to experiential” and taking risks, from the editing of brand assortments to how the store lays out.
• Saks is performing well. “Think about the positive comp growth we’ve had — seven out of the last eight quarters,” Metrick said. “We are not one of those retailers that are down 20 last year and now up five; 2017 was tough but I believe now we are taking share. I’m not sure the pie is growing.”
Moving beauty up to two was a big risk, raising questions over whether Saks would retain the steady buzz and high productivity that long characterized the beauty business on one.
“People were saying, ‘Gee, you moved beauty up to two.’ The industry was worried,” acknowledged Metrick. “For 90 years, beauty was on the main floor…But the customer was saying, ‘I want to experience it, and not in a basement.’ Arguably, the old beauty floor was frenetic and busy, and people coming out of the handbag shops were bumping into customers putting makeup on. So we moved it upstairs and created a whole different environment for beauty, a whole different way to experience Saks because the customer doesn’t want to come to the store anymore just to transact. They want to experience something, and what’s one of the most experiential things we have? Beauty. We touch your face. It’s actually one of the most intimate parts of the transaction that happens live in a store.”
Asked how the new beauty floor was faring since opening last May, Metrick replied, “When we moved it upstairs, we added a ton of square footage but didn’t have the vertical transportation [escalator] opened yet so we thought [business] would be down. It’s not down. We have been seeing positive growth. Everything we wanted to see — average transaction size, units per transaction — they’re all increasing. Anecdotally, people are spending more time in beauty than they did before. Brands are starting to feel better about it.
“Beauty needed to be treated better. I know that sounds odd since it was on the main floor and we moved it to two. But we added natural light. We brought in all these treatment rooms. We added services like FaceGym, Eric Buterbaugh florals, bespoke fragrances, a brow bar. You can get your nails done. We are doing all these things to make beauty much more experiential. It’s like the traditional department store meets the day spa.”
With the escalator operating as of just a few days ago, and the 2,600-square-foot hole in the second floor beckoning those below to come up, it’s almost like a reopening for beauty, Metrick said.
He sees some of the energy of two flowing down to one. “That’s why we cut the hole as big as we did, to suck some energy down. The LED light and its art on the ceiling beaming down from the escalator is going to create a buzz. Also, we re-lamped the entire store. The new light is softer and creates a much better energy. A couple of million people walk into the store each year. We are still going to have the ‘in and out.’ We are going to have that bustle. I don’t think it’s going to be some serene, quiet, cold feeling. Overall, we’ve done a good job of replacing that buzz.”
Industrywide, the handbag sector isn’t as hot as it was a few years ago. But Metrick said, “We still see our leather handbag business as a driver for us. It’s certainly a gateway drug to luxury. The business is actually good. This is not a business where we are seeing softening. It’s being given the right space. It is still an incredibly meaningful, innovative part of the business. Obviously, beauty is very productive because of the density of the product.”
Often, department store renovations are done piecemeal — a department here, a floor there. At Saks, Metrick said, the team took a holistic view.
“The entire thing is interconnected and there are so many dependencies with every single thing we do. A decision we made on L’Avenue was going to affect the main floor. It’s been a tremendously complicated but fun passion project for the entire team.
“We have an opportunity to change this icon, this brand that has meant so much to this industry. We are taking this very seriously. This is not piecemeal. This is one project. Internally, it’s treated as one project. In the past, we might have a men’s budget and the shoe budget, and there would have been these different budgets and different projects. This has one capital expenditure overall number.”
Originally, Richard Baker, chairman of the Hudson’s Bay Co., set a $250 million budget for the flagship. Saks ended up spending about $270 million, sources said, coming close to plan. Getting Starck and Rem Koolhaas involved no doubt added costs. The Gensler architectural firm designed the main and beauty floors.
With such prominent and large designer shops, does the Saks brand image get overshadowed?
“If you look at Prada, Bottega and Fendi and others, it’s their identification,” said Metrick. “It was very important for us, and maybe we view the world differently than our competitors, to be able to allow the brands, to amplify and present themselves in a way which makes them feel very good about how Saks is as a partner. While if you look at all the trim over the shops, it’s consistent, all Saks. You will not feel as if you are in a mall. You will feel like you are in Saks Fifth Avenue. In the middle of the floor, it’s the escalator. It’s open sell. It’s very exciting and you are going to feel very, very different from how you felt at Saks. Remember the old main floor? You walked in and you couldn’t see anything. You had a wall of beauty shops and small, tight vendor shops. Now you have these big powerful shops. When you walk in Fifth Avenue you can see the elevators in the back of the floor. You couldn’t see five feet in front of you in the old store.”