Two years after dramatic shift in styles, it returns to its well-heeled roots
From Staff and Wire Reports
RICHMOND, Va. -- Benjamin DeWinter believes his business is beginning to bloom again.
The manager of the Saks Fifth Avenue store in Richmond knows firsthand the struggles the chain has dealt with in the past two years, largely with fashion merchandise that skewed too young.
Chasing after those younger customers often alienated Saks' core shopper, who averages 48 years old.
Now Saks wants to reclaim its status among the well-heeled by selling more classic merchandise, including brands such as Ellen Tracy and Hart, Schaffner & Marks.
"We have a lot of customers who are from New York or Florida and have previously shopped in Saks," DeWinter said. "The history they brought was of the old Saks, but they came into a changed Saks."
The merchandise shift, which began in early 2004 under a former management team, didn't sit well with many shoppers.
"There was a cultural change. People are more comfortable of going back to their roots," DeWinter said.
"We do need to attract a younger customer, but you can't walk away from your classic customer base," he said. "We moved too rapidly."
Those changes took place just months after Saks opened its local store at the Stony Point Fashion Park in September 2003.
"That was a challenge for us . . . as we were going through our infancy," said DeWinter, who has managed the local store since it opened.
The recent shift at Saks is reflected in a new fall ad campaign that embraces a broader approach to fashion, highlighting more than 20 different must-haves, from fur-trimmed coats for women to rugged sport boots for men.
Later this year, the chain will bring back its petite merchandise, which had been eliminated two years ago. And Hart, Schaffner & Marks suits are available at six Saks stores, including the one in Richmond.
"We are beginning to see the light at the end of the tunnel. You will see a good fall, and it will continue through next year," said Ron Frasch, vice chairman and chief merchant at Saks Fifth Avenue Enterprises.
The chain also is refocusing on stores other than its Fifth Avenue flagship location. The chain operates 54 Saks Fifth Avenue stores and 50 Off 5th stores.
Its stores outside New York City often were overlooked, analysts say. Saks now is renovating some of those stores, including ones in Boston and Beverly Hills, to feature open cosmetic counters and more appealing fashion displays.
The Richmond store is nearly full with fall merchandise, a stark contrast to its spring selling season when some departments received little or no clothing or accessories.
To win back its most loyal customer, the chain is offering the Saks Fifth Avenue Private Collections, a replacement for Real Clothes, its store label brand that was dropped last year.
While trendy labels remain key, Frasch noted the company is beefing up selections in classic names in both men's and women's suits, as well as stocking up on such basics as bras. Saks is also investing more in couture lines such as Chanel and Fendi.
"We had become too clean," Frasch said. "We want to put more products on the floor so customers can see the depth and breadth of our offering."
Another key element is tailoring its stores to the local market by price and by consumer mindset, such as classic or contemporary.
For example, the Richmond store has merchandise that appeals more to a Southern, sophisticated, classic woman, DeWinter said.
The local store also has made other changes, including expanding its offering of women's contemporary apparel.
That department took over the area that had been devoted to men's contemporary clothing, which now has been combined with men's sportswear. Doing so gives the men's area the appearance that it is packed with merchandise.
Saks executives say a cultural change is sweeping the company, with buyers taking bigger risks on fashion instead of playing it safe and fixating on inventory control.
Still Saks faces heavy competition at the upper end from Neiman Marcus Inc., whose name is synonymous with luxury shopping, and at the lower luxury tier from Nordstrom Inc.
"Saks is facing a competitive situation where both Neiman and Nordstrom are doing extremely well. The issue is how successful will [Saks] be in executing from a merchandising and service standpoint," said Michael Appel, managing director of Quest Turnaround Advisors LLC.
Doug Harrison, president and CEO of Harrison Group, a strategic consulting group, noted that Saks Fifth Avenue is behind Neiman Marcus in personalizing customer service. He cited the success of Neiman Marcus' program called InCircle, which rewards customers with giveaways and special discounts based on how much they spend.
Saks could catch up, but it won't be easy, said Andrew Sacks, president of AgencySacks, an advertising agency focusing on upscale companies. Neiman Marcus is more attuned to fashion, he noted.
Steve Sadove, chief executive officer at parent company Saks Inc., told investors recently that consumers have not gone away.
"They may not be buying as much," he said. "And as we've started to have the right products, they are coming back."