Saks’ earnings continue to decline.
Wednesday, May 20th, 2009For the quarter ending May 2nd, Saks Fifth Avenue had a loss of $5.1 million versus a profit of $17.3 million last year. Revenues fell 27 percent and same store sales fell 28 percent. The New York flagship fell at a greater rate.
Diego Della Valle, owner of Tod and a vendor at Saks, now holds 6 percent of the company’s stock. Carlos Slim of Mexico is Saks’ largest stockholder. Hopefully these two men see greater things for the retailer and New York City. Slim is also a major holder of The New York Times.
This recession has clobbered New York City, particularly at the high-end where many stores have closed. Even on Fifth Avenue below Saks, there are more retail vacancies and lower-end food entries.
A store visit around noon Tuesday saw little traffic at Saks. Although there are many tourists on Fifth Avenue, they aren’t carrying packages. They are not like those tourists who could not get enough luxury merchandise a year or two ago.
The Dolce & Gabbana beauty site is first-rate. Procter & Gamble, the beauty licensee, did a great job on the former MAC site. There is a walk-in area with makeup tables and merchandising displays. I asked a beauty advisor what she called that area. “We call it our temple,” she said. Indeed, it is. The windows on Fifth Avenue were filled with photos of Scarlett Johansson, the model representing the D&G makeup line.
The cosmetics department was changed to favor designer names. MAC is now in a less-trafficked area where Trish McEvoy had been. McEvoy was moved to an area near Estee Lauder where Cle de Peau was located. Cle is near the Fifth Avenue entrance. The Cle beauty advisor said, “We’re closer to the action now.”
Sources say Trish is hurting as her business is heavily dependent on Saks and Neiman Marcus. D&G’s sibling, SK-II, lost its site near Christian Dior to Guerlain. SK-II is now near the elevators. Chanel, Giorgio Armani and Dior are among the designer brands that were upgraded at Saks. In the upcoming issue of The Informationist, we will discuss the problems facing Saks and Neiman’s.