BROADWAY UNITS ADDED TO SAKS’ WISH LIST FOR WEST COAST GROWTH
Byline: Sharon Edelson
NEW YORK — Saks Fifth Avenue, which has been moving fast to snap up new leases and strengthen its presence in the West, has added Broadway Stores to its shopping list.
“There could be a West Coast opportunity that could be brought about by some of the Broadway issues,” said Brian Kendrick, vice chairman and chief financial officer. “We’re aggressively looking for new opportunities for Saks.”
Federated Department Stores Inc. acquired the 82-unit Broadway Stores chain in October and last month said 40 locations will be converted to Macy’s. Five or six units will become Bloomingdale’s, and Sears, Roebuck & Co. will buy nine. The remainder will be sold.
Federated declined to comment Tuesday on Saks’ interest in Broadway sites.
Saks has stepped up its expansion and took a big step in December 1994, when it acquired four former I. Magnin units in Beverly Hills, Carmel and San Diego, Calif., and Phoenix. The four stores increased Saks’ square footage on the West Coast by 20 percent, to 765,000 square feet.
In October, Saks announced plans for a $21 million warehouse that will be able to handle $3 billion in sales and support the company’s expansion into the 21st century.
The retailer said its volume is expected to grow to $1.7 billion this year from $1.4 billion in 1994. “We’re very cognizant of the environment that exists in retailing today, where a number of retail chains are rationalizing where they are and how many units they want to have,” Kendrick added. “Our real estate group is actively looking for store opportunities throughout the country.”
The California economy continues to recover slowly, but Saks, along with Sears, Barneys New York and Federated see a big future there. Barneys opened in Beverly Hills in April 1994, and is hot to open in San Francisco. The company has yet to find a site, but officials have made several visits to the city.
Saks officials have also expressed interest in finding a site for a men’s store on Union Square in San Francisco.
Saks expanded in Beverly Hills in August, opening a 100,000-square-foot men’s store with special sizes for women in the former I. Magnin site. It also renovated and expanded its existing women’s store. Saks said it expects to do $80 million on an annualized basis in the combined stores. It did $40 million in the original store.
A major growth vehicle for Saks are the Off 5th clearance centers. A unit is set to open in Grapevine Mills, a Mills Corp. outlet mall north of Dallas-Fort Worth International Airport, in late 1997. Kendrick said the retailer is also negotiating to open an Off 5th unit in The Mall at the Source in Westbury, N.Y. However, Saks is also aggressively opening regular-price stores, either full-line or smaller units, some of which cater to resort communities. A full-line, 120,000-square-foot store is being planned for Huntington, N.Y., in 1997 at the Walt Whitman Mall. “We are on the cusp of making a deal with Corporate Property Investors,” owners of the mall, Kendrick said.
The mall is anchored by Macy’s and Bloomingdale’s, and there have been rumors that Lord & Taylor could be another anchor. A spokesman for The May Co., Lord & Taylor’s parent, said it does not comment on speculation about store locations.
Saks also said Tuesday it will open a 40,000-square-foot resort store in the Bell Tower Shops in Fort Myers, Fla., in the fall of 1996.
“We’re building up the west coast of Florida in the same way we developed the east coast of Florida,” Kendrick said, noting that the chain has nine stores in the state. Besides the resort stores, Saks wants to expand a new small store format, which will make its debut in Greenwich, Conn., next fall. Saks had planned to carry men’s and women’s wear in the 35,800-square-foot store, but a spokeswoman said Tuesday the store will carry only women’s apparel. Saks is looking for other opportunities for a men’s store in Greenwich, she added.
“That size store is a new venue that we hope to expand,” Kendrick said. “It’s a 40,000-square-foot store dropped in on Main Street, USA, in high demographic, high-profile locations. There are places around the country that may offer opportunities similar to Greenwich. Any big city has those opportunities.”
In California, Saks is also bringing its new strategy for bridal wear. This week it will open two 2,500-square-foot shops, called The Wedding Dress, inside its stores in South Coast Plaza, Costa Mesa, and Beverly Hills. The bridal shop in Beverly Hills is inside the Saks men’s store, which also carries special sizes for women. The Wedding Dress shops are leased operations run by Kleinfeld’s, the famous bridal store in Brooklyn. The shops have exclusives from designers including Jasper Conran, Louise Hamlin-Wright and Yumi Katsura, and also operate in the Saks Fifth Avenue flagship here and in the Atlanta branch.