Saks Fifth Avenue opens a new standalone shoe store concept

Discussion
Photo: Saks Fifth Ave
Oct 27, 2016
Matthew Stern

Saks Fifth Avenue has been trying to reinvigorate its appeal to high-end shoppers, even as department store traffic nationwide continues to wane. The chain’s latest move in one city indicates that it could be looking to reduce its full reliance on the department store model in favor of category-based stores.

Saks Fifth Avenue has opened a standalone shoe store in Greenwich, Conn., according to Footwear News. The store, named 10022-SHOE, gets its name from the zip code of Saks’ flagship location in NYC and has been used as the name of its shoe departments other locations. The standalone location allows for a drastic expansion of the shoe selection. The chain plans to open two more standalone stores with different themes — one, a contemporary boutique; the other, a jewelry store — in the coming year.

Saks went big with the opening, as reported in a separate Footwear News article, with a charity cocktail event attended by hundreds of guests. Proceeds went to Sole Sisters, the Greenwich United Way’s women’s initiative.

Saks Fifth Avenue president Mark Metrick said in an interview with Footwear News that the success of the main Saks store in Greenwich was instrumental in making the standalone shoe store work and that moving the footwear into its own store would allow for expansion within the main building.

The interview did not specify if the chain would only open standalone shoe stores and other category-specific outlets in the vicinity of its successful department stores. But we know that Saks is also putting down roots in new markets. In February the company announced a move into the highly competitive Canadian luxury market, despite what some see as a softening economy in that country.

Saks Fifth Avenue has also been testing methods of engaging new customers in existing markets. The chain’s “Saks at your service” program deploys personal shoppers to customers’ homes or hotel rooms with a customized wardrobe.

DISCUSSION QUESTIONS: Is opening up category-specific concepts like 10022-SHOE a smart move for Saks? Should Saks consider opening standalone shoe stores and other category-specific outlets in places where there are no existing Saks Fifth Avenue department stores?

Braintrust
"They'd do well to open more category-specific luxury goods in places without full-sized stores. "
"The city of Rotterdam has developed the Lijnbaan pedestrian shopping district ... They now openly regard this investment as a very public disaster."
"Do consumers have the time and patience to visit all these stores? This is a risky strategy."

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11 Comments on "Saks Fifth Avenue opens a new standalone shoe store concept"


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Ori Marom
Guest

Opening such new and fancy shoe fitting locations is great news for their main beneficiary, Amazon.com.

Saks Fifth Avenue’s parent company, HBC, seems to be quite sanguine about the viability of the department store as a winning retail concept and recently announced an ambitious expansion into my country, The Netherlands. They will soon take over 20 locations of the recently-defunct luxury department store chain V&D. Last year, they purchased the German department-store chain Galeria Kaufhof.

Does HBC know something we do not about the health of such department stores? I certainly hope so.

Richard Layman
Guest
1 year 5 months ago

To an American, it’s very obvious what’s different about department stores in Germany (and probably the Netherlands). At least with regard to Galeria Kaufhof stores, which I saw in Essen and Hamburg, they are embedded in thriving pedestrianized and central outdoor shopping districts adjacent to bustling train stations.

My sense is that in these countries, pedestrian shopping districts are still very central to people’s shopping behaviors. It might be doubling down on a declining retail type, but the Westons too have been buying department stores in continental Europe, which seems to show confidence in the strategy of supporting department stores where they continue to be successful.

Ori Marom
Guest

I beg to differ, Richard. Municipalities in the Netherlands, Germany and the UK have invested billions in the development of shopping-oriented pedestrian areas only to see inoccupancy rates of retail spaces at rates never previously recorded.

The city of Rotterdam, close to where I live, has developed the Lijnbaan pedestrian shopping district which also housed the local V&D. They now openly regard this investment as a very public disaster. The situation in the UK is even worse.

Richard Layman
Guest
1 year 5 months ago

Sadly, I haven’t had the opportunity to get out more around Europe. I’ve only been to Dortmund, Essen, and Hamburg. My understanding is that the Essen pedestrianized shopping district was the first such post-war example. There is no question that they will work in some places and not others (the US’s history of pedestrian malls starting in Kalamazoo in 1959 is instructive). I guess I was fortunate to see some of the more successful German examples — note those centers are still relevant because of how they complement highly used train (and bus) stations and the high transit use in those cities, conditions which mostly aren’t present in the US (but are in the Netherlands and Denmark).

Max Goldberg
BrainTrust

Upscale department stores need to find ways of attracting new customers. Their shoe departments are money makers. So why not open category-specific stores? Nordstrom would be wise to do the same. Perhaps they should add the option of online sales of other merchandise to complement these shoe-only stores.

Jasmine Glasheen
Staff
Jasmine Glasheen
Contributing Editor
1 year 5 months ago

Another great move by Saks. Customers want to buy from specialists, especially when they shop for upper-tier merchandise. If a customer is spending $200 on a pair of shoes, the salespeople better know all about them and be ready to impart some major enthusiasm.

This standalone makes Saks footwear a focal point. Plus, it allows the company to market products where there’s a buyer interest. They’d do well to open more category-specific luxury goods in places without full-sized stores.

I love the idea of Saks opening pop-up shops in smaller areas. Imagine the excitement surrounding a Saks pop-up pre-holiday season for customers who have previously never seen a Saks store in-person!

Camille P. Schuster, PhD.
BrainTrust

Having more real estate devoted to specific categories is risky in an environment in which fewer people are visiting stores. What makes the in-store experience special so people will visit? What makes the in-store experience special enough that consumers will want to visit several stores? Will consumers continue to visit the main store to see what else is offered? Do consumers have the time and patience to visit all these stores?
This is a risky strategy.

Ryan Mathews
BrainTrust

It all depends on how many markets like Greenwich it can find. Affluent customers do love shoes. As others have mentioned, this is a profitable category that affluent people like to shop … frequently. This doesn’t mean it ought to be a national template. The Saks customer is a specific type of consumer. Find pockets of them and it may justify opening a specialty store, depending on local competitive conditions. But before we get all enthusiastic about this, let’s see how the store performs over time.

Richard Layman
Guest
1 year 5 months ago

Well, like some supermarket chains starting to understand that they need to right-size and specialize formats between urban and suburban markets, there is likely potential for department store chains to do some select (and the key word is select) differentiation through such efforts, in categories where they are known to be exemplary and preferably with high margins. (Not that Sears has done very well by this with appliances.)

Like you said, this isn’t a concept that lends itself to multiple stores in multiple markets, but it can probably be successful on a selective basis and strengthen the brand.

John Hyman
Guest
1 year 5 months ago

Saks has a challenge — they have exhausted potential DMAs for their full-line stores and lack a strategy for smaller, less affluent/dense populations. Delivering single product categories may be the best solution for the “best” customer category in these under-served secondary markets. It may also reduce cannibalization from the existing full-line locations. It also requires a lot less capital investment at reduced operating costs.

My confusion arises from the branding; why not use the name people already recognize and like?

Craig Sundstrom
Guest

Whatever the merits of the idea may be, the name (IMHO) has nothing going for it. Why have a Saks affiliated business with no mention of the Saks name?

Now as for the idea itself, I think it will face a problem similar to what Walmart (presumably) encountered when they tried to operate smaller stores: when you operate big stores, you’re just not programmed to operate little ones. IIRC Saks experimented with a “small format” idea a few years ago — not sure whether it went bust or we just don’t hear about it — and while that concept made some sense, I don’t see a lot here.

wpDiscuz
Braintrust
"They'd do well to open more category-specific luxury goods in places without full-sized stores. "
"The city of Rotterdam has developed the Lijnbaan pedestrian shopping district ... They now openly regard this investment as a very public disaster."
"Do consumers have the time and patience to visit all these stores? This is a risky strategy."

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