Saks Fifth Avenue Announces Its Latest Flagship Makeover Plan

SFAflagshipAt this point, several announcements about major renovations for the enormous Saks Fifth Avenue flagship store have come and gone with little actual activity, often because top management has changed faster than they have been able to implement the ever more elaborate and expensive renewal projects. The most recent one came earlier this year when then president Marigay McKee presented plans which included a series of bi-level designer lifestyle boutiques that would ring the main floor and extend up to the second level creating what we could only imagine to be a construction nightmare that wouldn't actually solve the store's pressing merchandising problems. McKee's noisy but brief tenure as Saks president ended shortly after that announcement, and the plans were apparently scuttled.
Today, WWD reports that current Saks President Mark Metrick has announced a new 3-year $250 million renovation plan that is even more radical, shuffling floors and adding a lower concourse level and even a dramatic new elevator. Ordinarily we would simply sigh and say, "We'll believe it when we see it," but now that Saks appears to have settled more comfortably as a division of Canada's Hudson's Bay Company, we have a feeling that this plan, or at least parts of it, will stick. Here are some of the main points of what will ultimately be a startling shakeup of every floor in the store.

Handbags and Accessories will take over the entire main floor.
One of Saks' longtime merchandising struggles on Fifth Avenue has been an epic fight for space on the main floor of the original building between cosmetics and handbags. Despite the enormous amount of floor space, there has never been enough room for retail's two most profitable categories to coexist peacefully there along with jewelry, and it would appear that cosmetics has won, taking over almost all of the floor space, and pushing accessories to a series of in-store shops around the store's perimeter and an undersized multi-brand handbag section crammed into the escalator atrium. This forced handbag customers to not only shop in a cumbersome ring around the huge main floor, but also to have to contend with aggressive makeup reps while buying purses.
In a reversal, Accessories have now gained the upper hand, and will not only take over the front of the main floor, but also the Swiss Tower sections behind the escalators currently occupied by jewelry. That department will be divided between the new concourse level downstairs to be called "The Vault" for precious gems and watches and part of the tower section of the second floor which presumably will house semiprecious baubles. It's a big change that will not only make it easier to sell those high-margin accessories, but should also mollify some important luxury brands without their own in-store shops who could not have been happy with the puny accessory area around the escalator atrium. This means that...

Cosmetics will move to the second floor.
Competitors Bergdorf's and Barneys have previously solved space problems by creating expansive makeup deportments in luxuriously renovated basements, but Saks will twist that scheme by moving it upstairs instead for 53% more space. The second floor at Saks is currently dedicated to more separates-oriented women's designer collections (they used to call it Designer Sportswear), but the section in the front of the store hasn't seen a major renovation since the 1970s, which is when the dramatic wooden superstructure you see there now was installed. Presumably, it will finally be cleared out. How will Saks keep what must be one of the biggest cosmetics departments in the world humming without the main floor foot traffic? A new glass elevator with a 23-foot staircase spiraling around it as well as an additional escalator will be installed in the center of the main floor to ferry customers up to two and down to the new jewelry concourse. Having cosmetics on two will trade the main floor's hectic —and extremely loud— ambiance for a more relaxing environment that will encourage customers to buy more. It will also save store visitors from having to brave battalions of fragrance models on their way to the upper floors, which is a win for everybody

Women's apparel will shrink from four to three floors.
With cosmetics moving up, women's wear will lose an entire floor, but the entire women's departments are being re-imagined. No longer to be stratified by price between the second and fifth floors, women's departments will now be arranged by lifestyle, with varying price points and different designer collections on every floor between 3 and 5. In addition, a new department call "The Ballroom" will be created on the 9th floor devoted only to eveningwear including shoes, handbags and jewelry. Bridal will also be included on the floor as well.

While Men's will remain on 6 and 7, it too will be rearranged with more of a lifestyle point of view, and other departments will be tweaked and moved around. The plan is one of the most elaborate store renovation plans we have seen, but, assuming it is fully carried out, it will give Saks some long overdue changes and updates. Don't get too anxious to see the results, however. It is not projected to be completed until 2018. In the meantime, there will be much construction disrupting the store, but when it is finished, it should result in a state-of-the-art ready to do battle just as fierce competitor Nordstrom sails into town.

Master Plan for the Saks Flagship Breaks Convention (WWD)


What Got The New President Of Saks Fifth Avenue Fired After 15 Months?

Marc-metrickSaks Fifth Avenue surprised the fashion and retailing industry yesterday afternoon by announcing that its new, high-profile president, Marigay McKee, had left the company and would be replaced by Marc Metrick (pictured right), executive vice president and chief administrative officer of the Hudson’s Bay Co. A year and a half ago, hiring McKee's away from Harrod's in London was considered a coup for Saks which had just been acquired by HBC. She was unafraid of making herself the face of the retailer, and enthusiastically vocal about her plans to upgrade the chain's stores with a higher luxury quotient to better compete with rival Neiman Marcus —particularly the Fifth Avenue flagship, which seems to be continually in a state of reconfiguration and renovation. McKee seemed almost like a throwback to flamboyant merchant princes like Marvin Traub of Bloomingdale's or Stanley Marcus who ran their companies with a hefty dose of dazzle dazzle.
So why did HBC's glittery new hire go sour so quickly? In today's post-mortem in WWD, David Moin seems to suggest that it was not her professional abilities but her management style that got her canned. According to unnamed sources, McKee stepped on many toes which led to the departure of too many valued longtime Saks personnel including most prominently chief merchant Jennifer De Winter who recently decamped to Tiffany. McKee is described as a not a "good fit" for the store, and as someone whose office frequently saw people leaving in tears after meetings with her. This, apparently, made it difficult to attract new talent to replace fleeing, formerly stalwart personnel who became attractive to other companies, a state of affairs that should be corrected with her departure as searches for several executive positions are under way.
And yet, it's hard to imagine that it was only management style that caused her dismissal. There are plenty of celebrated fashion and retailing executives whose management antics make industry insiders shudder. Was there something more behind McKee's firing? HBC executives stress that the extravagant $250 million re-imagining of the Fifth Avenue flagship store would proceed as planned, although McKee's vision included radically reconfiguring several floors including creating two-level in-store boutiques for luxury labels that would rise from the main floor to the second. A dramatic renovation like that including other plans for the building would likely cost quite a bit more than $250 million in New York City and put the store in a state of construction for years at a time. While Saks has real problems appropriately configuring its space, particularly on its over-packed main floor, that solution might have been overly costly even for HBC which is committed to investing in the store's redesign. McKee's other initiative was to cull the store's vast matrix of vendors and cut loose the brands that weren't making enough profit for the store, but a year into McKee's tenure saw Saks's flagship packed with merchandise, with every possible nook and cranny of the selling floors fitted with a rack for full-priced goods. For a store supposedly devoted to paring down its brands, it looked more like they were buying every possible label they could and throwing them on the floor to see what stuck with customers, as opposed to the strategy of a seasoned merchant carefully crafting an upgraded fashion image. Contrary to increasing the luxury quotient, it made Saks feel more like a moderate department store full of racks —not the best way to compete for customers looking for the most upscale shopping experience.
As for her replacement, Marc Metrick was a 15-year veteran of Saks before he came to HBC three years ago, so he comes with the longtime understanding of the store and its culture that McKee lacked. He is not, however, a merchant, but he looks exactly like the kind of person who is often brought in to steady a ship that has been rocked a bit too hard. So HBC's grand plans to strengthen Saks against its rivals has hit a delay, and the clock is ticking. While Bergdorf Goodman has always been the main store Saks vies with for customers in New York City, its two biggest competitors nationwide, Nordstrom and Bergdorf sibling Neiman's, are headed to Manhattan within the next few years. By then, Saks will have had its second store in the borough open at Brookfield Place in the Financial District. What it needs right now is the right merchant to get it ready for the influx of competition.

Marc Metrick In, Marigay McKee Out at Saks By David Moin (WWD)


Barneys' Baz-Dazzled Holiday Promotion To Debut On Thursday
Unveiling Dates For Lord & Taylor,
Saks & Bergdorf's

Thanksgiving is kinda late-ish this year, which seems to have given New York's retailers license to unveil their Holiday windows as early as possible. Walk past Manhattan's big stores this week and see all the windows conspicuously shrouded as the visual teams furiously work to get those lights and tinsel trees in place. Barneys' highly publicized promotion with film director Baz Luhrmann is set to be unveiled tomorrow, just as the weather is finally expected to cool down to something reasonably appropriate for the Holiday season (it is currently 61˚F  outside as we type this). 
Barneys has a lot riding on the Luhrmann collaboration. It's Holiday promotions have hit sour notes for the past three years running which is particularly embarrassing for a store whose hilarious Holiday windows were once the talk of the town and one of the store's signature elements. This time, under Luhrmann's direction, the store will be going big and reintroducing some glitter and whimsy back into its newly super-serious minimalistic store. The Madison Avenue storefront will be covered with an elaborate façade (rendering pictured above), and, beyond just having animated displays, Luhrmann, is wife and creative partner Catherine Martin and designer Zaldy have been creating elaborate costumes for live performers who will appear in the windows and on the store's balconies throughout the season. Shoppers can look forward to ice skaters in the windows and a dancer/contortionist called Elphresh who will appear in a glittering gold romper. Weekends will bring the Queens of Night and Light appearing hourly on the store's second floor balconies in voluminous ballgowns to serenade the Madison Avenue crowds and more. We are cautiously optimistic that, after forays into celebrity, cartoons, ostentatious hip-hop-tinged special items and pretentious artsy-fartsy-ness, the folks currently running Barneys may have finally found their way back to the kind of sensibility that originally endeared New Yorkers to Barneys in the first place. If this Holiday promotion resonates with customers, maybe they will re-evaluate that "Taste! Luxury! Humor!" slogan they were so quick to dismiss.
Anyway, Barneys isn't the only store throwing itself a party tomorrow. Lord & Taylor, which is undergoing its own ongoing rejuvenation program, will be lighting up its windows on Thursday as well.
Bergdorf Goodman will be unveiling its windows, currently the city's most acclaimed, on Monday the 17th. The UNICEF Snowflake over the intersection of Fifth Avenue and 57th Street will also be lit simultaneously, and 10% of the evening's proceeds will be donated to the U.S. fund for UNICEF.
Saks Fifth Avenue is conservatively holding its Holiday window reveal back until Monday November 24. With new ownership and management, the store is also looking to make a splash, so say goodbye to those illuminated dancing snowflakes on the façade that the store has presented in the past seasons. This year, Saks is promising The Rockettes themselves at the unveiling as well as a display from Fireworks by Grucci. The windows will pay tribute to the Roaring '20s and include brand new high-tech projections and lighting schemes. The launch will be live-streamed at
Bloomingdale's will be celebrating its windows on Monday as well with a live performance from Broadway star Idina Menzel at 5 PM on the Beacon Court of the Bloomberg Building across 59th Street along with the cast of the Off-Broadway show Illuminate.
Plan to leave work early.

The Holiday Race: Barneys Taps Baz Luhrmann For One More Shot At Holiday Glory


Saks Downtown Rumors Gain Steam

Brookfield The rumors that Saks Fifth Avenue has designs on the Financial District took on a lot more credibility today as The Wall Street Journal reports of a comprehensive plan to bring not only a full line Saks store but also an Off Fifth outlet unit and headquarters for all of corporate parent Hudson's Bay Co. U.S. operations to the neighborhood. The Journal notes that negotiations are ongoing and could still fall apart, but the landlord in all cases would be Brookfield Office Properties Inc., and the proposed Saks Fifth Avenue store would be, as previously reported, placed at the Brookfield Place luxury retail complex at what was previously known as the World Financial Center. The Off Fifth would take over the Brooks Brothers store at  One Liberty Plaza which Brookfield also controls. The office space for Saks, Saks Off Fifth, Hudson's Bay and Lord & Taylor would comprise collectively a whopping 400,000 square feet, making this a substantial real estate deal by anyone's standards.

What would this mean for downtown shopping? For the new luxury shopping district downtown that is being created where there was never one before, a full line Saks would serve as strong anchor that would benefit all the designer boutiques expected to open not only in Brookfield Place, but also nearby in the new World Trade Center towers. It would also likely be the only instance of both a Full Saks and a Saks Off Fifth being separated by only a few city blocks. Typically, retailers like to keep a healthy distance between their main stores and their more downscale outlet divisions, but the compact nature Manhattan's cityscape makes that less of an issue. At One Liberty Plaza, Off Fifth would compete directly with the newly expanded Century 21 flagship which is arguably the city's top off-price fashion retailer. The Journal reports that all parties would like to close the deal before the end of the Summer, so some sort of confirmation one way or another should be coming in the next few weeks. Stay tuned.

Saks Looks to Expand Downtown (Wall Street Journal)
Rumors Now Have Saks Heading To The Financial District


Now Is The Time To Hit
The Department Store Sales

At this time of year, we here at The Shophound HQ can get immersed in keeping up with the ever-expanding plethora of sample sales that are going on right about now —so much so that we sometimes forget that the best shopping in the city is still often found in its unparalleled luxury department stores. Instead of running from one dusty showroom and sale facility to another, you can often maximize your shopping efficiency in the city's legendary retailers, Saks Fifth Avenue, Barneys New York and Bergdorf Goodman, who have all taken second reductions this week. Our friends at the Madison Avenue Spy, who always have one keen eye focused on mid- and uptown shopping and sales, have made a handy chart telling us who is on sale right now and by how much.


Leave it to them to boil things down to the three stores that really matter in terms of designer shopping. The above three are the ones who tend to mark a price tag and stick with it —to a point— and also have the widest assortment of desirable designer labels. Bergdorf Goodman is on its second markdown at 60% Off for men's and women's apparel which is typically the final one. Women's shoes and handbags are at 50% Off, which could go down further, but may not.

Barneys is at 60% off in pretty much every department except children's (Do we care about children's? Maybe you do). Don't look for further reductions or an extra percentage off. Do not wait for the Warehouse Sale. They are not happening anymore. Any leftover merchandise will be shifted to the Warehouse Sale online store where extra promotional reductions will happen periodically, but usually without notice. It's also worth noting that it is the 21st century, and Barneys is still marking its sale tickets with red ballpoint pens like a neighborhood mom and pop shop. This can leave room for human error in either your or their favor, so make sure you double check those ticket prices before buying.

Over at Saks, reductions range from 50% to 60% off which is OK, but its seasoned sale shoppers know that this is just an interim reduction until the big consolidation final sale next month. Price tags will not be marked further, but there will be a sizable opportunity to take a hefty extra percentage off those tags when the time comes, bringing savings down to 70% Off or more.

While Bloomingdale's (not listed above) does carry some serious designer brands on certain floors, discounts tend to vary from day to day and special event sales add and subtract additional discounts at random. They are always worth a look on holiday weekends (July 4th coming up) which tend to be extra promotional, but it's good to know at what rate competitors are on reduction before you invest.

So there you have it. If you are sick of trotting from Sample Sale to Sample Sale, don't forget about our department stores. They have great deals right now and also, not insignificantly, private dressing rooms, convenient rest rooms, shipping services and reasonable return policies.

Where You'll Find the Best Deals (Madison Avenue Spy)


Rumors Now Have Saks
Heading To The Financial District

BrookfieldNews about stores heading to various locations underconstruction in the Financial Disrtrict is dominating this week's retail news. This time, it's Saks Fifth Avenue that is said to be close to signing a lease to anchor Brookfield Place's upcoming retail complex in what was formerly known as the World Financial Center on the West Side Highway (rendering at right). Though nothing has been confirmed, the rumor is featured in a front page article in WWD, which lends it more credibility than some other publications might be able to offer. The surprise here is that nobody thought there was enough room in the complex to accommodate the full-line Saks store that is expected to be announced. According to WWD, Saks would combine two separate spaces, of 20,000 and 25,000 square feet and possibly add more. If a full-sized Saks branch were to open downtown, it would make it the first major department store with two full locations in Manhattan if it can beat Barneys return to its original Chelsea home which is still a few years off. Bloomingdale's in SoHo, in contrast, is a specialty concept store that presents only select departments from its regular assortments, excluding the home collections and many apparel departments that are typically found in its branch stores.

This rumor is more convincing than some others because the chain's new owner, Hudson's Bay Company, is eager to exploit its new property, and its new president, Marigay McKee has been emphatic about building up Saks' luxury quotient. What better way way to showcase that than with a brand new, high profile store in New York City. That's not all the Saks has planned for the neighborhood, however. It is reportedly planning its first Off 5th outlet store east of Vesey Street that would compete directly with Century 21's recently expanded and upgraded flagship a few blcks across town. While the area has a long history of discount shopping, it is still unproved as the kind of luxury shopping area that is currently being built and aggressively marketed to potential tenants. Though it probably wouldn't be ready to open by next Spring when Brookfield Place's retail complex is expected to open with signed stores like Hermès, Ferragamo and Zegna, a powerhouse anchor like Saks could ultimately attract shoppers in a way that a collection of boutiques cannot, which would go a long way toward establishing the Financial District as a real (as opposed to potential) shopping destination. Expect to hear a lot more about Saks and other proposed arrivals to the area in the coming weeks.

Saks Fifth Avenue Eyeing Downtown Store Location (WWD)


Sale Shopping At Saks Is Relaxed...
Until You Get To The Shoes

It has been years since The Shophound went shopping on the day after Christmas —mainly because it can easily top Black Friday insane, aggressive bargain grabbing even in the most exclusive of stores. This year, however, we thought we would give it a shot, just to see if there was enough merchandise left after some pretty heavy pre-Christmas price promoting. In the past few seasons, stores have been extremely tight regarding inventory, so that by the time the Holidays rolled around, there was often only meager selections left for clearance business. This year, there was a bit more confidence in the market, and Holiday business in general has been closer to more optimistic expectations. Rather than making a tour of every store in Manhattan (seriously, how much energy do you think The Shophound has?) we picked Saks Fifth Avenue as our microcosm to see just how the immediate day-after-Christmas sales would pan out this year. 

As in the past, Saks opened at 8 AM this year on December 26th offering extra discounts on marked down goods of up to 50% only until noon, when the discounts mostly reverted to 30% off. This brings savings up to 60% to 70% off, which is generally as good as or sometimes better than waiting for the final clearance sales that will come next month. While we have seen the main floor packed on such days in previous years, we were surprised to see things relatively subdued on the main floor when we entered sometime around 9 AM —possibly because the handbag and accessories departments at Saks are so sprawling and fragmented. Expect this arrangement to change once the chain's new owners start shaking things up, but for now, activity felt key, and as we rose on the escalators, we saw sale racks with a good number of customers, but not the rabid frenzy we were expecting. Then we hit the first men's floor on 6, where the shoe sale racks were swarmed (pictured below). It was a challenge just to get near the section for our size, and one floor up, where the casual and designer men's shoes were racked up, it was equally as crowded. It was one floor up on Saks' vast women's shoe floor where things were really getting crazy —or so we could see from the escalator (pictured above). It seems that the women's shoe department was so crowded and busy that security had to close it to new customers, letting them in one by one as other shoppers left. It turns out that as much as nearly every department store in the city has enlarged its shoe departments, they can never get big enough. New York shoppers' desire for shoes —whether full-price or on sale— seems to know no limits. The other part of the store that seemed to come close in activity was on the Ninth floor where most of the rest of the men's sale merchandise was consolidated in a vast arrangement of racks. Perhaps this set-up is better for daily numbers, but it made for a very tight shopping environment. One might question whether or not a luxury store like Saks should really turn itself into a discount-store environment just because it is sale time, but that is a question for management and new owners to ponder. Now that the immediate, before-noon discounts have expired, things should quiet down a bit, but there's still a big vacation weekend coming up with lots of people and tourists on vacation as well as the possibility of extra New Years Day discounts, so if there's still money burning a hole in your pocket, there will still be some opportunity for savings in the next week or so.


Get A Look At Thom Browne's Insane Spring Collection In Saks' Windows

Thom Browne was at Saks Fifth Avenue today for a trunk show featuring his controversial Spring 2014 collection. When we call it insane, we aren't trying to be snarky. That was his artistic intent for the runway show which featured models in giant birds' nest shaped hairdos and makeup that appeared to be a tribute to Heath Ledger's Joker from The Dark Knight. Like most of Browne's runway shows for both men and women, the general effect was extreme to say the least. Now that the visual department at Saks has virtually replicated the show's styling for the store's prime Fifth Avenue windows, you can get a closer look at the fascinating combinations of materials and meticulous workmanship that went into these outfits. Of course, you have to get up pretty close and peer through the venetian blinds inspired by the ones that obscure Browne's own boutique on Hudson Street, making the display appear even more mysterious (Did you even know that there was a Thom Browne boutique in New York?). It's going to take a whole lot of editing and adaptation to get prominent Browne customers like Michelle Obama, or anyone else for that matter, into these clothes, and the way they wind up hanging on the racks in stores like Saks and Barneys may not ultimately be as potent as the way they appear here, so it's worth going out of your way to check out these truly unusual designs in their original form —while they last.

Have a look at a few more shots in the gallery below

  • ThomBrowneSaks-A
  • ThomBrowneSaks-B
  • ThomBrowneSaks-C


Lord & Taylor's Parent
Buys Saks Fifth Avenue

SaksFifthAvenueAfter a period of time on the block marked by wild speculation (like a merger with Neiman Marcus?) Canada's Hudson's Bay Co. has emerged as the winning bidder for Saks Incorporated, the company that includes Saks Fifth Avenue, and outlet chain Saks Off 5th. The total transaction is valued at about $2.9 billion, and adds Saks to a portfolio at HBC that includes the Canadian chains Hudson's Bay and Home Outfitters as well as New York's Lord & Taylor

HBC beat out several suitors for Saks including icluding private equity firm Kohlberg Kravis Roberts, which was behind the questionable notion of merging Saks and Neiman Marcus which has also been put up for a possible sale, and the Qatar Investment Authority, a sovereign wealth fund of the Emirate's royal family, whose major retail holdings include London-based Harrod's and Paris-based Printemps.

What does this mean for Fifth Avenue neighbors Saks and Lord & Taylor? The chains are expected to be run as separate entities serving different market segments. The merger will create opportunities for Saks Inc. stores and to enter Canada and compete with luxury stores over the northern border like Holt Renfrew, for example, as well as a projected cost savings for HBC of $97.3 million over the next three years. No management changes are expected in the immediate future at Saks, and customers shouldn't immediately notice any difference in the store's operations. Saks CEO Steven I. Sadove announced, “We are excited about what this opportunity and being part of a much larger enterprise can mean for the future of the Saks Fifth Avenue brand,” while HBC Richard A. Baker commented,“This exciting portfolio of three iconic brands creates one of North America’s premier fashion retailers.”Now we can turn our attention to wondering who will wind up owning Neiman Marcus?

Saks Sells Itself to Hudson’s Bay, Owner of Lord & Taylor By Michael J. De La Merced (Dealbook/NYTimes)


Department Stores Take Over

If you look at out SALE ROLL sidebar to the left, you will notice that this week's Sample Sale schedule is light, or more like nonexistent. It's probably the Fourth Of July holiday in the middle of the week that has put everything off, but if you absolutely must continue shopping, this would be a good week to hit the department stores for final markdowns. Barney's and Bergdorf Goodman's tags have hit 60% off the original retail prices. Saks Fifth Avenue is expected to offer an extra discount on sale merchandise on the Fourth, which could bring savings up to 70% off or more, and Bloomingdale's can be reliably expected to do the same on any given holiday. So even if you are averse to the vastness of department stores, this week would be the one to check them out.