Saks’ Post

Once upon a time in the vast retail kingdom, there was a peculiar giant named Saks—a ruler with a curious strategy. Imagine playing Jenga with gold bars, each representing a payment owed to majestic luxury brands. But, plot twist, Saks decided to quietly stack those bars aside, adding tension to the game with ads. Swanky antics? Or a masterful maneuver in the art of commerce slalom? Remember that time we expected Mr. Monopoly to run out of cash? Welcome to that board game, folks, where Saks holds the dice. Cartwheeling under those high ceilings bedecked in Chanel and Gucci, they’re attempting a finance tango that has these marquee fashion houses holding onto not-so-loved IOUs. Let’s get practical here: Retail giants are supposed to be the dependable fortresses where luxury orders go to forge profitability. With Saks' behavior breaking the mold, do the winds signal a storm waiting to unleash fury, or is this the brewing of a revolution dance taking traditional economics by surprise? Either way: - Some brands may need to adapt to unpredictable financial winds - Other retailers might reconsider their pathways to sustainability - We might see quirky lessons for the entire supply chain Reflecting on Jenga once more, there’s that feeling of anticipation—the suspense that has even our most stoic fashion houses wincing. As Saks does its delicate dance, the structure wobbles, holding fragile glamour overhead. What practical sorcery is at play? Marketeers and economists share knowing, speculative glances whilst gold collapses or towers still. Predictably, this strategic move from Saks is a robust wake-up-call wrapped in cashmere—a risky intellectual ballet in our fast-evolving retail theatre. Wager placed, fashion insiders impatiently wait, debate wistfully over cappuccinos. The horizon sparkles with question marks. Synchronized moves or spiked shoes? Is it a masterclass in audacious innovation? Only time will draw out our collective gasp —or applause. https://lnkd.in/emdgfXDV #RetailDrama #LuxuryDance #EconomicWonders #FashionEconomics #CoutureConundrum #RetailRevolution

Saks Fifth Avenue in San Francisco will now require all shoppers make an appointment. The move is essentially about Saks trying to make the San Francisco store work better. A store that operates by appointment only can get away with far fewer staff, and it can manage staffing levels and inventory depending on demand. It also a way of preventing theft and retail crime, which has been a particular problem in the city. Of course, this only works because Saks has customers that spend very high amounts in a single transaction. It's a low volume, high order value business model. Still, it will be interesting to see how the economics of the store shift as it adapts. I spoke with Business Insider about the move. The article is linked in the comments. #retail #retailnews #stores #luxury #appointment #personalshopping

The Abercrombie & Fitch Co. renaissance is real, especially this summer with their linen blend lines of simple but high quality staple pieces. The common exchange that I've had myself many times now; "Where's that dress from?" "Abercrombie!" "Really?!" The come back is not only happening in millennials closets across America, but also at the stock exchange 📈 "The Abercrombie brand, once an easy cultural punching bag, now brings in more revenue than it did when it dominated teen culture in the aughts. (Last year, sales reached $2.2 billion.) Its namesake parent company, which also includes the beachy teen retailer Hollister, is now the toast of Wall Street and a curious case study for business reporters. The stock is one of the best-performing of the last two years, with growth outpacing even AI-chip giant Nvidia." https://lnkd.in/e25BPzu6

Is the Department Store becoming antiquated? 🤔 There are signs this is the case, but time will tell... ⏳ *** The department store sector, once a retail giant, continues to face significant challenges amid rising competition from discount retailers, e-commerce, and shifting consumer preferences. Macy's recent struggles exemplify the industry's current state, with a 3.8% decline in net sales for Q2 2024 and planned closures of at least 150 stores by 2026. Despite some positive metrics, like improved gross margins, Macy's outlook remains cautious as it adjusts its revenue expectations downward. Meanwhile, the luxury segment is also under pressure. Saks Fifth Avenue, despite its acquisition of Neiman Marcus Group, is reportedly behind on vendor payments. Nordstrom has decided to go private, further signaling the shifting strategies among department store leaders as they adapt to a changing market. Conversely, Von Maur, though relatively unknown to many consumers, has been named "America’s Best Department Store" for the third year in a row, highlighting how smaller, service-oriented retailers can still thrive. The landscape is not entirely bleak for department stores. While traditional models struggle, international stores like Selfridges, Galeries Lafayette, and WOW Concept are adopting experiential retail to remain competitive, focusing on immersive in-store experiences and sustainability. These changes are helping them stand out in an increasingly digital world. In contrast to the department stores' struggles, off-price retailers like Burlington Stores, Inc., Ross Stores, Inc., and The TJX Companies, Inc. are thriving. Burlington reported a 13% increase in sales for Q2 2024, while Ross and TJX also posted strong financial performances, benefitting from inflation-weary consumers seeking discounts. Ultimately, while the department store model continues to face pressure, its extinction may not be imminent. Retailers that evolve and innovate, whether through improved customer service, adapting store formats, or leveraging digital tools, may still find a place in the market. However, for many, the clock is ticking as they try to navigate the balance between tradition and transformation. 🛍 *** #Retail #Store #Chain #Department #Outlook #Business #Future

“You're free to make your own choices, but you're not free from the consequences of that choice.” Operating the e-commerce business from the Stores business was supposed to be a value unlock that made the Saks.com business more valuable than the Stores. In such an interconnected shopping world separating the Reach of the "Clicks"/E-com business from the Touch of the "Bricks"/Physical Stores had the potential for some consequences - some of which are being seen now. Many pure-play E-commerce brands have experienced profitability challenges associated with such a business model and building a path to profitability. For them, Customer Acquisition Costs, building Customer Lifetime Value, and being able to address returns (especially in a sized business where customers continue to 'bracket' their purchases, buying multiple sizes, trying on at home and returning, possibly more than they keep). Your thoughts? Excerpts: Dive Insight: The separation of Saks Fifth Avenue’s online and offline operations centered on the notion that the e-commerce business, thanks to its tech prowess and appeal to young shoppers, was more valuable than its legacy brick and mortar and needed to be unleashed. But signs have emerged that operating online can be a drag on profitability. A few luxury players in particular have faltered recently, with Farfetch facing downgrades before being acquired by e-commerce platform Coupang for $500 million. Last month luxury site Matches went bankrupt just months after it was acquired by Frasers Group for $66 million. In Q4, Saks.com’s gross merchandise value fell 8% year over year, an improvement from Q3’s 19% decline, according to the research from BTIG’s Stichter. That performance points to a “challenged but stabilizing” performance in luxury overall, though online players could be vulnerable to competition, according to that report. #saks #Ecommerce

Tony Spring , CEO of Macy's presenting about Macy's Bold New Chapter Tony is excited about the road ahead with the Macy's family of brands. Street cred to Tony for quoting Jelly Roll's speech from the Grammy's, "The windshield is bigger than the rear-view mirror for a reason." 🤘 Digital and retail transformation started with Bloomingdale's and Blue Mercury. Record year in growth and NPS. Believes Macy's will see success ahead. Key areas of focus across brands ahead: -Strengthen Macy's nameplate - customers needs are not being met. Closing low performing stores -Revitalizing Macy's assortment, more lux brands, adding new private brands by middle of 2025 -Accelerating luxury growth with small format stores called Bloomie's, and 30 new Blue Merc stores, 30 more to be modernized -Simplifying and modernizing operations to ensure improved inventory in the right channels #shoptalk2024

2 takeways from Marc Metrick: 1) The success of each luxury brand hinges on its technology stack, and embracing the potential of AI presents an extraordinary opportunity to significantly enhance the services offered by these brands. 2) Luxury clients exhibit remarkable resilience, often being the last to decline and the first out during economic declines. The demand for luxury products remains steadfast, provided that the offerings are truly captivating.

Saks Fifth Avenue has a long history of struggling wtih making their online business work. Additional capital always helps the cause but the headline was interesting. Many e-commerce retailers are pumping up their model as the solution whereas Saks notes the “challenging macro economic conditions”. Time will tell but as I often say, the department stores are struggling as they try to find the best “next path”. Retail isn’t for the weary but opportunities abound for those that excute well. #retail #retailnews #retailtrends #ecommerce #omnichannel #departmentstore #cre https://lnkd.in/g7t3xnu5

New CEO of Macy's, Tony Spring, plans to refresh the business with these strategic changes: -Close 30% of underperforming Macy's stores (150 out of 500) within 3 years -Focus on enhancing remaining stores and expanding smaller chains (namely Bloomingdale's & Bluemercury) Enhance customer preferences: -Scale down size of Macy's stores (30,000-50,000 sq ft) -Expand private label offerings -Less cluttered spaces and more attentive service -Optimize clothing presentations and more mannequins Do you think these strategies will be effective? Please share your thoughts! #commericalrealestate #wsj #therealdeal #cre #realestate #finance

Yesterday I posted about Nordstrom leaning more into wooing the luxury shopper, while questioning whether store location was rhe bigger issue. Today’s news on Macy’s further illustrates what appears to be complete confusion within the department store channel, as retailers twist, turn, and contort, as they quickly shift strategies. Macys is also now targeting the luxury shopper, but in the same press release states that it’s focused on value. The company will also trim selection and pull from brick and mortar to invest more heavily in the online business. Meanwhile, Kohl’s is blaming the online business and trimming that in favor of more store investment. These are three companies and it’s okay to have three strategies, but there appears to be no end to the red flags in this very difficult channel. #toystrategist #toys #retail https://lnkd.in/ejrVVNwU