Saks’ New Tact

Discussion
Jan 10, 2006
George Anderson

By George Anderson


Brad Martin, the CEO of Saks Inc., is stepping down and his hand-picked successor is likely to jettison what is left of the department store chain’s middle-tier business to concentrate on its luxury brands.


Mr. Martin will be replaced by Stephen Sadove, a marketing executive whom the New York Post described as a “nice guy” with the ability to unite a company that has seen its fair share of infighting.


Mr. Sadove’s move up spells the end of Saks Fifth Avenue CEO Fred Wilson’s tenure at the company. Mr. Wilson was criticized for being a divisive influence within the company.


According to a Post report, Mr. Sadove called a meeting of Saks executives back in 2003 after Mr. Wilson had come on. “He really got people to open up,” according to an unnamed source. “Before that, people had been afraid to say anything.”


Sadove’s previous experience before joining Saks Inc. includes marketing stints at General Foods and Bristol-Myers Squibb.


“Steve is not a merchant, but because he’s a marketer, he understands brand positioning,” said another unnamed source.


Moderator’s Comment: Is Stephen Sadove the right person to lead Saks? What will he and his team need to do to turn the company around?
George Anderson – Moderator

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6 Comments on "Saks’ New Tact"


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Richard Layman
Guest
15 years 1 month ago

Would Proffits have been better off never buying Saks Fifth Avenue, and just focusing on regional department stores?

Craig Sundstrom
Guest
15 years 1 month ago

“Steve is not a merchant, but because he’s a marketer, he understands brand positioning…” UH OH! It sounded pretty good until we got to that point.

Saks’ fame, of course, came from being an exclusive New York (based) store, and its renewal is likely to be based on a return to that concept. Of course that’s easier said than done — Nordstrom and Neiman have taught us that fashion doesn’t have to come out of Manhattan — but whatever road it chooses, Saks should concentrate on one goal: mixing together contradictory goals like cost cutting AND growth AND improving morale makes no sense. Good Luck.

Don Delzell
Guest
Don Delzell
15 years 1 month ago
I am unfamiliar with any retailer being successful with a non-merchant in the visionary role. Defining “successful” might help. Paul Pressler may be successful at The Gap, but probably not by the norms usually applied in the retail world. Merchant insight, calibrated intuition, and the application of focused talent are crucial aspects to guiding a retail enterprise. If Brad Martin is to be successful, it will be because he uses his management skills to empower and support true merchants at other levels in the company. Saks’ brand equity is completely a function of the shopping experience. You cannot create sustainable retail brand equity through great marketing. The product experience is too lengthy, too important, and too much a part of the social fabric for marketing messages to overcome poor delivery at the store. In fact, one of the greatest mistakes made is to create an image through marketing which is not sustained in shopping experience. CPG background does not well prepare executives for the challenges of delivering well engineered and consistent product which supports and… Read more »
Mark Lilien
Guest
15 years 1 month ago

Saks locations are often much smaller than their high-end department store competition, so their assortments and sales skills need to be very special. Otherwise, people tend to shop in the store with the larger assortment, all other things being equal. In the locations I’ve visited recently the sales people were fine, but the assortments weren’t special enough. The more unique Saks becomes, the better off it will be.

Todd Reber
Guest
Todd Reber
15 years 30 days ago
I have read that once Parisian is sold, Saks can go private and then sell themselves to a investment group like Neiman Marcus did. I also read that an investment group who can buy Lord & Taylor, plus Saks Fifth Avenue would have a great combination of stores to expand nationwide. But will it happen? Lord & Taylor’s direction under May Company was lack luster, and Saks Fifth Avenue, when combined with Proffit, went down hill. Both need new management with a creative spark to make them be different from the competition and yet still have all the elements we remember from a by gone era. Can it be done? I say yes, but will it be done – that is the $50.000 dollar question. I wrote, in the Lord & Taylor being sold comments, that we are getting to the point where choices are getting fewer. My personal view is Lord & Taylor will be sold and then broken up, a lot of their locations going to Neiman and Nordstrom or just closed. I… Read more »
robert minge
Guest
robert minge
15 years 5 days ago

Lord & Taylor was once a great name in retailing under the direction of legends such as Dorothy Shaver and Walter Loving. When May purchased the chain, the end was near. Imagine opening so many stores, thus cheapening the image. May was never known for luxury merchandise. Less is more even in positioning of stores. They brought in too many moderate price-points. One could find the same goods at Filene’s! Many of the salespeople where really just clerks, especially in the mall locations. This story proves that a store must have a niche, not try to be appealing to all.

Saks is a truly upscale name in this business. The company needs to update its merchandise and close older unattractive locations.

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