Saks opens in China
US department store Saks Fifth Avenue plans to open stores in China and Macao. The first opening is planned for Shanghai in 2008.
Parent company Saks has been struggling with a weak performance from its Saks Fifth Avenue chain. China represents a new, fast-growing market with enormous potential for purveyors of luxury goods. Its large population represents a new source of revenue for the company, which already has licensed stores in Riyadh, Saudi Arabia, and Dubai.
Saks's Chinese licensing partner is Roosevelt China Investments, a private investment company. Roosevelt will locate and develop the sites for the stores and will operate them as well.
The first Saks store will open in the old Bund district of Shanghai, in time for the 2008 Olympic Games in that city. Counting 300,000 square feet, it will be the company's second largest store after its Fifth Avenue flagship. If the Shanghai store performs well, Saks will consider expanding into other Chinese cities.
Saks chief executive Stephen Sadove said that China represents “a very, very substantial growth opportunity” for the company, but added that it remains focused on the US market, where it is increasingly focusing on its luxury division.
www.saksfifthavenue.com
20 April 2006
Bon-Ton buys Saks stores
US retail group Bon-Ton Stores announced on Monday its agreement to the purchase of 142 stores from Saks Northern Department Store group for $1.1 billion (£622 million) in cash. This makes Bon-Ton one of the largest regional department store retailers in the US . The transaction is expected to be completed in the first fiscal quarter of 2006. Saks earlier rejected an offer from Bon-Ton before agreeing to this one.
“We believe (this) will drive greater profitability, and a robust retail platform from which to attract and retain key vendors,” Bon-Ton chief executive Bud Bergren said in a statement. Bon-Ton has 139 department stores in the Northwest and Midwest and two furniture stores. With this acquisition, approved by both companies' boards, it will have a total of 281 stores in the region. Saks' Northern Department Store group operates Bergner's, Boston Store, Carson Pirie Scott, Herberger's and Younkers. Last year it generated $2.2 billion in sales, equal to a third of Saks' total sales.
With the sale of this division, Saks will be left with Saks Fifth Avenue Enterprises, which operates 105 stores, its Parisian chain with 40 stores, and Club Libby Lu which operates 56 stores. Earlier this year Saks sold a group of Southern department stores to Belk for $622 million. Bergren expects earnings from the acquisition immediately after completion of the transaction, with cost cuts commencing in 2006. He said he expected earning to reach at least $33 million by 2008.
www.saks.com
www.bonton.com
1 November 2005
Saks fires executives
On Monday, Saks Inc. announced that it had fired its chief accounting officer and other top executives following an internal investigation. The company was investigating improper collections of markdown allowances and found that $20 million (GBP 10.7 million) had been taken from vendors between 1999 and 2003, The Associated Press reported. Saks, which is also subject to an informal inquiry by the Securities and Exchange Commission and the US Attorney's Office in New York, said that no inappropriate collections had taken place last year. It said that it would reimburse the vendors accordingly.
The review resulted in Saks asking its Chief Accounting Officer Donald Wright and Saks Fifth Avenue Chief Administrative Officer Donald Watros to resign. Brian Martin, the former general counsel for the company, was also asked to resign. Saks added that other employees "directly involved in the over-collection" would also be asked to resign and those that had failed to "adequately supervise" those involved would receive disciplinary actions, including termination.
www.saks.com
12 May 2005
Saks Department Store Group Acquires Exclusive License for Laura Ashley Women's Apparel and Accessories for North America
Retailer Saks Incorporated (NYSE: SKS) (the "Company") today announced an agreement with Laura Ashley, Inc. to license the "Laura Ashley" trademarks for use in certain product categories. Under the agreement, the Saks Department Store Group ("SDSG") has obtained exclusive rights in North America, outside of Laura Ashley's owned stores, for Laura Ashley women's apparel and certain accessory categories.
The "Laura Ashley" brand will be managed by the SDSG private brand organization based in Birmingham. Through the agreement, Saks has the right to produce and sell women's apparel (including misses, petite and large size sportswear, dresses, swimwear, and outerwear) and accessories (leather handbags, small leather goods, and jewelry) bearing the Laura Ashley name. Laura Ashley apparel will be introduced into approximately 125 SDSG stores in fall 2002, with accessories introduced into approximately 125 SDSG locations in fall 2003.
Management expects that Laura Ashley apparel will be in all SDSG stores by fall 2003, and that Laura Ashley accessories will be in all SDSG stores by fall 2004. George Jones, President and Chief Executive Officer of Saks Department Store Group, noted, "The name Laura Ashley has tremendous brand equity and recognition, and it is synonymous with classic style and quality. We are extremely excited about this partnership which supports our strategic direction for SDSG by providing distinctive and differentiated product offerings to our core customers."
Company Information http://www.saksincorporated.com