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Saks Fifth Avenue

From Wikipedia, the free encyclopedia

Saks Fifth Avenue
Company typeSubsidiary
IndustryRetail
Founded1867 (157 years ago) (1867)
FounderAndrew Saks
Headquarters,
United States
Number of locations
  • 42
Areas served
Key people
Marc Metrick (president, 2015)
Parent
Websitesaksfifthavenue.com
Footnotes / references
[1][2][3][4]

Saks Fifth Avenue (originally Saks & Company; colloquially Saks) is an American luxury department store chain headquartered in New York City and founded by Andrew Saks. The original store opened in the F Street shopping district of Washington, D.C. in 1867. Saks expanded into Manhattan with its Herald Square store in 1902 and flagship store on Fifth Avenue in 1924. The chain was acquired by Tennessee-based Proffitt's, Inc. (renamed Saks, Inc.) in 1998, and Saks, Inc. was acquired by the Canadian-based Hudson's Bay Company (HBC) in 2013.[5][6]

As of March 2021, Saks Fifth Avenue operates its brick-and-mortar stores and e-commerce platform as separate divisions, distinguished as SFA and Saks, respectively.[7] Saks Off 5th, originally a clearance store for Saks Fifth Avenue, is now a large off-price division in its own right.[8][9]

History

Saks & Co.

Saks & Co. Indianapolis, 1906

Andrew Saks was born to a German Jewish family, in Baltimore, Maryland. He worked as a peddler and paper boy before moving to Washington, D.C. where at the age of only 20, and in the still-chaotic and tough economic times of 1867, two years after the United States prevailed in the American Civil War, he established a men's clothing store[10] with his brother Isadore.[11][12] A. Saks & Co. occupied a storefront in the Avenue House Hotel building at 517 (300–308) 7th Street, N.W., in what is still Washington's downtown shopping district. Saks offered his goods at one price only, no bargaining, and offered refunds on merchandise returns, neither of which were the more common practice at that place and time.[citation needed] Saks was also known for its "forceful and interesting, but strictly truthful" newspaper advertising, according to the Washington Evening Star, including a two-page spread, large for that time, in that newspaper on April 4, 1898. Saks annexed the store next door, and in 1887 started building a large new store on the site of the old Avenue Hotel Building at 7th and Market Space (now United States Navy Memorial Plaza).[13]

By 1896, Saks and Co. had stores in Norfolk and Richmond, Virginia; New York City; and Indianapolis, in addition to Washington, D.C., where, Saks called itself "Washington's Wonderful Store".[14]

Saks opened a very large store in 1902 in New York City's Herald Square on 34th Street and Broadway.[13][15]: 2  Andrew Saks ran the New York store as a family affair with his brother Isadore, and his sons Horace and William.[citation needed] Andrew Saks died in 1912 and his son Horace took over the company's management.[15]: 2 

Saks and Co. and Kann's, NW corner of 7th St. and Pennsylvania Av., Washington, D.C., 1920.

Saks Fifth Avenue

In 1923, Saks & Co. merged with Gimbel Brothers, Inc., which was owned by a cousin of Horace Saks,[16] Bernard Gimbel, operating as a separate autonomous subsidiary. On September 15, 1924, Horace Saks and Bernard Gimbel opened in the Saks Fifth Avenue Building at 611 Fifth Avenue, with a full-block avenue frontage south of St. Patrick's Cathedral, facing what would become Rockefeller Center.[17] The architects were Starrett & van Vleck, who developed a design derived from classical architecture.[15]: 4–5 

SFA Miami Beach on Lincoln Road, 1940

Resort and university stores

When Bernard's cousin, Adam Gimbel, became president of Saks Fifth Avenue in 1926 after Horace Saks's sudden death, the company expanded, opening seasonal resort branches in Palm Beach (1926), Atlantic City (1927), Lincoln Road in Miami Beach (1929), Southampton on Long Island (1931), Newport, Rhode Island (1935), Sun Valley, Idaho and Westbury, L.I. (1936), and Greenwich, Connecticut (1937).[18]

In 1929, Saks opened its first full-line, year-round flagship store in Chicago, in 1929, and only six years later moved to a larger location.[18] By the end of the 1930s, Saks Fifth Avenue had a total of 10 stores – the 2 large urban flagships in New York and Chicago, and 8 resort stores.

During World War Two, Saks opened Navy and Army shops in New Haven, Connecticut and Princeton, New Jersey, and after the war turned the small branches into University Shops, catering to the Ivy League communities there. More University Shops would open, one near Harvard in Cambridge, Mass., another in Ann Arbor, Michigan (1960).[18]

New urban flagships

SFA Beverly Hills

Saks had already opened two urban flagship stores before the U.S. joined the war: its now-legendary store in Beverly Hills, and in Detroit (1940). After the war, three more downtown stores opened, albeit smaller in scale: Pittsburgh (1949), Philadelphia (1952) and San Francisco (1952)[18] where Saks competed head-on with local luxury champion I. Magnin.[19]

Suburban malls

During the 1950s, the shift from downtown shopping to suburban shopping malls gained momentum. Saks Fifth Avenue's first anchor department store in a mall in 1954, at Sunrise Center, now The Galleria at Fort Lauderdale. A few of the new suburban stores were freestanding in suburbs that had a significant downtown shopping district, such as in White Plains, New York (1954) and both Garden City, Long Island and Surfside, near Miami in 1962. A few were in malls built in downtowns, such as New Orleans, Boston, and Minneapolis. But most new SFA stores, dozens, opened in malls over the decades through the 1990s.[18]

1990s

1992 view of Saks Pavilion, Houston, where SFA operated 1974–1997.

Sunbelt expansion

More expansion followed through in the 1990s particularly into Texas, Florida and California.

California-based I. Magnin closed in 1995, allowing Saks to acquire some of their locations and open in San Diego's Fashion Valley and expand in Carmel. As in the 1950s, the company opened a wave of smaller "Main Street" stores in suburbs with downtown shopping, such as Pasadena, Santa Barbara, and San Diego's La Jolla in California, and in Greenwich, Connecticut, and Charleston, South Carolina.[18]

Sports-themed displays at SFA Houston, 1987

In Texas, Saks acquired 3 Texas locations where Marshall Fields was exiting. In 1997 SFA moved its main Houston store from the Saks Pavilion to The Galleria and added a new location at Town & Country. In the Dallas Galleria, Saks moved within the mall to a larger location. In addition to the former Field's locations, SFA Austin opened in 1997 and Fort Worth in 2000.[20]

In Florida in the 1990s, 7 Saks Fifth Avenue stores opened, for a total of 11 stores by the end of the decade, adding Palm Beach Gardens,[21] Naples,[22] Fort Myers,[23] Orlando,[24] Sarasota,[25] Tampa[26] and doubled the size of its Boca Raton store.[27]

Commercial changes

Also in 1990, the company launched "Saks Off 5th", an outlet store offshoot of the main brand, with 107 stores worldwide by 2016.[28]

In 1998, Proffitt's, Inc. the parent company of Proffitt's and other department stores, acquired Saks Holdings Inc. Upon completing the acquisition, Proffitt's, Inc. changed its name to Saks, Inc.[29][30]

2000s

Middle East expansion

In November 2001 the first Middle East SFA opened at Kingdom Centre in Riyadh, Saudi Arabia.[31][32]

In 2005, Saks opened a 80,000 square foot store at the BurJuman Centre in Dubai which closed in 2016; the store was Saks last store in the UAE after failed attempts at expansion.[33]

In 2008, Saks opened its third Middle East store at City Centre Bahrain in Manama, Bahrain. The store has two floors and is 57,000 square feet (5,300 m2) in size. After closing Riyadh and its 2 Dubai stores, it remains Saks' sole store in the Middle East.[34][35]

Eight US SFA stores close

In 2004, Saks was enjoying an annual sales growth rate of 7.7% on a same-store basis, but was underperforming Neiman Marcus (+17%) and Nordstrom (+10%). In Southern California, analysts said that SFA was "struggling to maintain its cachet" against the two competitors and Bloomingdales. On October 1, Saks announced the closing of 8 underperforming, mostly smaller SFA stores: Pasadena, Palos Verdes, Mission Viejo, La Jolla and Carmel in California, Garden City NY, Hilton Head SC, and Downtown Minneapolis.[36][37]

Mexico expansion

SFA Polanco (opened 2010, closed 2020) at Plaza Carso Mexico City 2015

In November 2007, Grupo Sanborns, part of billionaire Carlos Slim's corporate empire, secured a franchise and opened the first SFA store in Mexico, on the affluent far west side of Mexico City at Centro Santa Fe, that country's largest mall. Another store opened in the affluent urban neighborhood of Polanco at Plaza Carso in 2010, but it closed in October 2020.[38][39][40][41][42]

Commercial strategies

In August 2007, the United States Postal Service began an experimental program selling the plus ZIP code extension to businesses. The first company to do so was Saks Fifth Avenue, which received the ZIP code of 10022-7463 ("SHOE", on a U.S. touch-tone keypad) for the eighth-floor shoe department in its flagship Fifth Avenue store.[43]

During the 2007–2009 recession, Saks had to cut prices and profit margins, thus according to Reuters "training shoppers to expect discounts. It took three years before it could start selling at closer to full price".[44][45][46][47][48][49]

2010s

In 2012, Saks licensed its first store in Central Asia, in Almaty, Kazakhstan, at the then-new Esentai Mall, together with boutiques of international luxury brands. SFA Almaty is 3 floors tall and 91,000 square feet (8,500 m2) in size.[50][51][52]

In 2012, the Riyadh franchise store, owned by Prince Al Waleed bin Talal Al Saud, closed after the licensing agreement expired.[31][32]

As of 2013, the New York flagship store, whose real estate value was estimated between $800 million and over $1 billion at the time, generated around 20% of Saks' annual sales at $620 million, with other stores being less profitable according to analysts.[44][53]

On July 29, 2013, Canada-based Hudson's Bay Company (HBC), the oldest commercial corporation in North America and owner of the competing chain Lord & Taylor, announced it would acquire Saks Fifth Avenue's parent company for US$2.9 billion.[54]

SFA Brickell, Miami, opened 2016

Canada expansion plans were drafted, calling for up to seven SFA stores across the country, of which three eventually opened. In February 2016, it opened a 150,000 sq ft (14,000 m2) Saks Fifth Avenue in downtown Toronto, in a section carved out of the building housing the flagship of its namesake department store, Hudson's Bay Company, connected by sky bridge to the largest downtown mall, Eaton Centre.[55] A second Greater Toronto location opened at Sherway Gardens shortly thereafter.[56] And in February 2018, its third Canadian store opened nearly 2700 km west of Toronto, in Calgary at Chinook Centre.[57]

In 2015 Saks began a $250 million, three-year restoration of its Fifth Avenue flagship store.[58] In October 2015, Saks announced a new location in Greenwich, Connecticut.[59][60] In autumn 2015, Saks announced it would replace its existing store at the Houston Galleria with a new store.[61][62][63][64]

2020s

2021

On January 15, 2021, Saks Fifth Avenue unveiled a 54,000-square-foot (5,000 m2) space on the fifth floor of its New York flagship, branded Barneys at Saks. The collaboration is aimed at continuing Barneys New York tradition of unearthing and promoting emerging designers.[65]

On January 25, SFA launched the first standalone Barneys at Saks store in a 14,000-square-foot (1,300 m2) location in Greenwich, Connecticut. This marked the first time Saks had offered men's clothing and furnishings in that market.[66]

In March, HBC and growth capital investor, Insight Partners, established Saks Fifth Avenue's ecommerce business as a stand-alone entity, known as "Saks." Insight Partners made a $500 million minority equity investment in Saks. The retailer's 39-store fleet operates separately as an entity referred to as "SFA," which remains wholly owned by HBC. At the time of the separation, HBC named Marc Metrick, CEO of Saks, the ecommerce business. Metrick was previously president of Saks Fifth Avenue since 2015.[7][67]

In April, Saks announced that it would close all 27 of its fur salons, among which New York, Boston, Philadelphia and Beverly Hills, by the end of January 2022. The company also said that by January 2023, it would stop sales of products made from fur of wild animals or from animals raised for their fur.[68]

In August, the company announced a collaboration with WeWork to convert some SFA spaces to co-working locations.[69]

2022

In June 2022, Saks announced that it would convert the original 1938 store building in Beverly Hills, 9600 Wilshire, into offices and apartments. SFA Beverly Hills continues to operate from the former I. Magnin and Barneys buildings, which had previously been incorporated into the store complex.[70]

In August of the same year, Grupo Sanborns announced that in 2023, it would close its SFA franchise store at Centro Santa Fe in Mexico City, the only store still operating in Mexico after the closure of the Polanco store two years earlier.[71] A branch of Sears Mexico, also part of Grupo Sanborns, was to replace it, and staff were to be retained.[72][42]

Legal controversies

In 2005, vendors filed against Saks alleging unlawful chargebacks. The U.S. Securities and Exchange Commission (SEC) investigated the complaint for years and, according to the New York Times, "exposed a tangle of illicit tactics that let Saks... keep money it owed to clothing makers", inflating Saks' yearly earnings up to 43% and abusively collecting around $30 million from suppliers over seven years.[73] Saks settled with the SEC in 2007, after firing three or more executives involved in the fraudulent activities.[73][74]

In 2014, Saks fired transgender employee Leyth Jamal after she was allegedly "belittled by coworkers, forced to use the men's room and repeatedly referred to by male pronouns (he and him)".[75][76] After Jamal submitted a lawsuit for unfair dismissal, the company stated in a motion to dismiss that "it is well settled that transsexuals are not protected by Title VII of the Civil Rights Act of 1964."[75][76][77] In a court filing, the United States Department of Justice rebuked Saks' argument, stating that "discrimination against an individual based on gender identity is discrimination because of sex."[78] The Human Rights Campaign removed the company from its list of "allies" during the controversy.[75][76][77] The lawsuit was later settled amicably, with undisclosed terms.[78]

In 2017, following the events of Hurricane Maria in Puerto Rico, Saks's San Juan store in Mall of San Juan suffered major damages along with its neighboring anchor store Nordstrom. Taubman Centers, the company which owns the mall, filed a lawsuit against Saks for failing to provide an estimated reopening date and failing to restore damages after the hurricane due to a binding contract.[79][80] Although Nordstrom reopened on November 9, 2018,[81] Saks Fifth Avenue vacated The Mall of San Juan after two years of ligitation.[82]

Notable locations

Saks–34th Street

The Herald Square Saks & Co. store in 1903, behind the 33rd Street station
The footbridge that connected Gimbel's to Saks 34th St.

Saks-34th Street was a fashion-focused middle market department store at 1293-1311 Broadway on Herald Square. The building, built in 1902, had seven stories and was designed by Buchman & Fox.[83] The store was spun off from Saks & Company when that upscale retailer moved to Fifth Avenue, a location that Saks Fifth Avenue maintains to this day.[84] The newly renamed Saks-34th Street was sold to Bernard F. Gimbel,[83] and became a part of the New York division of Gimbels (later Manhattan Mall), and a sky bridge across 33rd Street connected the second floors of both flagship buildings.[85] In the 1947 movie Miracle on 34th Street the facade of Saks-34th Street is shown in a scene that focuses on the Gimbel's flagship store. Branch locations were opened around the greater New York area. The store closed in 1965, citing poor layouts, no escalators, a confused identity, and outdated facade.[83] After Gimbels decided to close the division, the first floor of the building was used as a Christmas season annex for Gimbel's before being sold to the E. J. Korvettes chain.[86][87] After the demise of the Korvette's chain the building was remodeled into the Herald Center, in 1985. As of 2016 the primary tenant is H&M, following another remodel.[88]

Beverly Hills

The original Saks Fifth Avenue store in Beverly Hills, California, at 9600 Wilshire Boulevard, was designed by the architectural firm Parkinson and Parkinson, with interiors by Paul R. Williams.[89][90] The store opened in 1938.[91] The store was immediately successful upon opening and it would subsequently expand to almost 74,000 square feet (6,900 m2) and employ 500 people.[92] Williams created an interior reminiscent of his designs for luxurious private residences, with rooms lit by indirect lamps and footlights focused on the clothes.[89] New departments for furs, corsets, gifts and debutante dresses were added in the 1940 expansion.[92]

The store relocated to the adjacent 9570 Wilshire Boulevard in 2024, and the original location will be converted into a mixed-use development by Hudson's Bay Company.[93]

Gallery

References

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External links

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