She’s small in stature and humble in nature, yet the scrappy, determined side of Tracy Margolies, the chief merchant of Saks Fifth Avenue, emerges as she talks business.
“I’m uberfocused on creating an aggressive buying culture — on Saks being first,” she stressed. “It’s taking risks. It’s understanding the competitive market share. It’s introducing new and emerging designers.
“There are a lot of things we have been working on. We are elevating our message, becoming more fashion-forward. We are going out there in a much bigger way. I would say that’s what I am really focused on as a leader. Definitely more fashion risks.”
For her first interview about her agenda for Saks, the 41-year-old Melville, N.Y.-born Margolies is wearing a silk Gucci blouse and a pleated A.L.C. maxiskirt. It’s a colorful, avant-garde combination that seems to reflect the message she’s conveying about the Saks brand and where it’s going.
While all of luxury is dragging due to changing shopper habits and diminished tourist spending, the 41-unit, $3 billion Saks doesn’t seem as hamstrung as the competition by virtue of being part of the $9 billion Hudson’s Bay Co. retail conglomerate, which can be supportive. Amid the weakened retail landscape, Saks is opportunistically increasing square footage, pursuing digital growth and adopting new marketing and product programs.
The Fifth Avenue flagship is undergoing a $250 million, three-year transformation to reconfigure the selling floors. The mission is to modernize the merchandising to better reflect how people shop, namely cross-shopping different labels and price ranges; draw shoppers through more of the store by providing greater vertical transportation and easier sight lines; maintain a luxury appeal without intimidating visitors, and set a less harried environment. The flagship has historically accounted for about 25 percent of the chain’s annual sales.
“When you walk into our store, you will be able to feel a fresh, modern approach that will be very Saks. It’s fashion. It’s relevant,” said Margolies. “I definitely feel we are pushing the envelope. I definitely feel confident in our approach that we have a strong Saks point of view, that we have a strong editing process.”
Margolies said that between 2016 and 2017, the Saks flagship will have 100 new points of designer distribution, meaning designers previously not sold at the store will be added, and some already carried will be seen in more categories for greater consistency. Victoria Beckham and Céline are being added to the third floor, and Gianvito Rossi shoes were recently added to eight.
This fall, a designer lifestyle floor with shops for Altuzarra, Jason Wu, Marc Jacobs, Moncler, Brunello Cucinelli and others opens on four; the Fifth Avenue Club for personal shopping on three expands to the fourth floor as well, and an outdoor terrace serving drinks debuts, providing a reprieve from the rigors of shopping and a grand view overlooking Rockefeller Center.
There will also be a flurry of full-line store openings starting August 25 at International Market Place in Waikiki, Hawaii; Brookfield Place on Sept. 8, and later in the fall, Brickell Center in Miami, and the first standalone Saks 10022-Shoe store in Greenwich, Conn.
The expansion continues in 2017 with a Saks’ men’s shop in March in Brookfield Place and contemporary designer and jewelry stores in Greenwich. In early 2018, two full-line stores will open, in Calgary, Canada, and in the American Dream mall in East Rutherford, N.J., which Margolies promises will be “an A store flagship.”
The first two Saks stores in Canada opened in February in Toronto’s Eaton Centre and Sherway Gardens, and another full-line store opened in Houston last April.
Also last April, Margolies launched Saks’ “designer showcase,” an open-see for designers seeking to sell Saks. A second is planned for spring 2017. “The team really got together and we vetted over 200 brands,” Margolies said. “We ended up with two [Roberta Einer and Vetta] but the idea and the concept is that we are always looking for what’s new, and always looking to surprise and excite our customer.” Of the many viewed, “There is definitely a list of brands that we will look at again.”
To build up vendor partnerships, Margolies has adopted a “360-degree approach” lavishing royal treatment on a single designer brand for about two weeks in most cases, with Fifth Avenue windows, intensified marketing, increased space, exclusives, and display on the “wow wall,” which is between the main floor elevator banks. The approach can also be applied to other top Saks locations. “When we send a message, how are we hitting it home with all the different touchpoints? It’s the ‘wow’ wall. It’s digital. It’s social. It’s a product campaign,” Margolies said.
A Fendi 360 is in the works for this fall and earlier this year, Saks installed a Prada shoe salon with a made-to-order program and enhanced marketing. Saks does not sell Prada ready-to-wear. “Not right now,” Margolies noted, suggesting the store will one day.
Since joining Saks just over a year ago, Margolies has filled two key slots: Roopal Patel became senior vice president and fashion director and “the face and voice of the Saks brand,” and Dayna Ziegler became vice president of merchant initiatives, a right-hand for Margolies and a new position in the organization.
Margolies started her career in 1996 as an intern at Bergdorf Goodman and became a buyer there. She then shifted to Saks, where she was vice president, women’s footwear department merchandise manager, and part of the team spearheading the 10022-Shoe strategy. She returned to Bergdorf’s, where she was most recently senior vice president, general merchandise manager for beauty, contemporary, footwear, accessories and handbags, before rejoining Saks as chief merchant.
When she returned to Saks last year, “First and foremost it was about the people,” Margolies recalled. “The thing I thought about my first week here was passion. You can teach retail math, but you can’t teach the merchant community how to be passionate. I am really working to make sure everyone feels my passion about product. Any time I am with a trainee and they ask ‘What is the most important quality a merchant can have?’ I say passion, and that being in fashion is not just about having a job. It’s about having a career.”
She pointed to Patel as integral to “moving this company forward. I hired Roopal to go after the fashion messaging and really moving it forward.” That involves Patel creating “it lists” to flag trends where Saks takes a stand. “We need our associates, our stylists and our customers to understand what they have to buy. So we give them a checklist every season,” devised by Patel. “It’s really important to me that Saks has fashion authority. I don’t recall us ever having an authoritative voice.”
Ziegler acts as point person for all initiatives, helping Margolies in projects such as new stores or redevelopments, and merchant initiatives, like holiday gift-giving.
Though the Saks team (and the Lord & Taylor one too) is moving out of its 49th Street offices across the street from the flagship to Brookfield Place beginning next month, Margolies will stay close to the site as it undergoes change. “It really is a redevelopment, not just a renovation,” she said. “We are always thinking about the experience in New York, and the experience, honestly, in every project.”
One objective is to get customers to stay longer at Saks. “We really want to make it not just about shopping. It’s about having a great time and feeling good,” Margolies said. “The way we are approaching New York is very different. It’s definitely going to be merchandised by lifestyle in certain aspects. There will be unexpected things on every floor with lots of experiences.”
She declined to go into detail, aside from citing the terrace and the previously announced trendy L’Avenue restaurant from Paris that will replace Cafe SFA.
“We are moving forward, thinking about the future. We’re growing pretty rapidly and we are investing in our stores which is really important.”
HBC does not break out Saks’ capital expenditures but indicated that for fiscal 2016 across the portfolio, the group is making higher-than-normal capital investments. Net of landlord incentives, investments this year will be between $750 and $850 million, with 40 percent for store renovations including the Saks flagship and renovations to HBC’s European stores; 30 percent for new stores, and 30 percent for digital and technology advancements.
It’s clear where Saks sees merchandise opportunities, with plans for the main floor of the flagship to be dominated by leather goods and soft accessories; beauty relocating and gaining square footage on two, and shoes getting showcased with the opening of the Saks 10022-Shoe specialty shoe store in Greenwich, in October. Whether the specialty shoe concept gets rolled out remains to be seen.
Saks will have a unique footprint in Greenwich, with four stores in total made up of separate specialty stores for shoes, contemporary sportswear and jewelry, as well as the existing women’s store for designer and beauty.
Saks’ Brookfield Place women’s store will have “a much more advanced assortment — more edited, more curated, merchandised by lifestyle rather than branded shops,” Margolies said. Among the brands to be sold: Vetements, Nocturne, 1205 and Leur Logette.
“The men’s store [at Brookfield Place] is going to be merchandised a bit differently, not by lifestyle. We are excited by new ideas we are going to incorporate into men’s but it’s not going to be the same concept as women’s.”
Chainwide, Saks will reflect what Margolies sees as “a sort of casualization” adding, “Our job is to make sure we are exciting, for all end uses. That could be for going to a soccer game, a luncheon or black-tie event.”
Does Saks, which has been viewed as attracting an older audience, need to get younger in its appeal and attract more Millennials? “I wouldn’t say it’s about a specific age,” Margolies said. “My impression is that everyone wants to feel modern and relevant and that’s what we need to do. I think we are doing things to attract a different audience.”
One example, Margolies cited happened last January. “We did this big thing on our fifth floor, collaborating with AKT and SoulCycle on exercise classes,” which might be more expected at Macy’s or Nike. “Our customers loved it,” she said. “The classes were filled.”