Saks Fifth Avenue Makes Cuts to Improve Revenue

Even the most luxurious of fashion retailers, Saks Fifth Avenue, can’t escape the hard hit from the economic downturn.

“I doubt you’re going to see a lot of new stores opening on the full-line side,” said Stephen Sadove, Saks’ Chief Executive. “It’s going to be making the current stores more productive.”

Sadove was speaking about stores that would be closed, which include those that have a lease expiring and those that are losing money. {Wall Street Journal} There’s no specification of which category the Portland Saks stores, announced for closure this year, fall into. But considering both the stand alone men’s store and women’s store are getting the axe, it’s likely they’re in the latter.

Scaling back on extravagant spending is something all too common these days, with some even considering it chic. Online isn’t immune, as wealthy shoppers there turn to mid-market retailers like Macy’s and discounters like Gilt and Bluefly for designer purchases. Other luxury retailers like Neiman Marcus and Tiffany & Co. all saw declines this year in holiday sales, and struggle with clientele affected by the market.

A reflection of this subdued shopping mood is seen on the runways of some of the top designers who are using more basic colors and prints, {All Business} simpler silhouettes and the use of layering and interchangeable pieces to emphasize making the most of what you buy.

Advertising costs may also have something to do with company sales loss. Advertising pages are scarce among the most influential fashion magazines like Vogue, whose ad pages were down 36 percent last year, even though the magazine had a 6.3% increase in circulation during the first half of the year. With luxury fashion houses still so heavily reliant on magazine advertisements as their primary communication method, the decreased exposure there coupled with consumers severely tightening their purse strings make it clear that companies looking to regain momentum still have a long road ahead.






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