Saks Upgrades Merchandise as Wealthy Spend More
While those in the middle and lower rungs of the economic
ladder have had to continue economizing with the high price of fuel and other
commodities, the nation’s
wealthiest consumers, while not wholly immune, have pressed on with their spending.
Ryan Mathews, founder and chief executive of Black Monk Consulting and RetailWire BrainTrust
member, pointed out in an earlier discussion on this site, "The rich are different
from the rest of us — they have money. And, people with money often go shopping.
Retailers catering to higher end clients will probably see a contraction in
aspirational shopping by the almost (or hoping to be) rich, but the real rich
should keep on spending."
Saks Fifth Avenue was among
the luxury chains that saw sales swoon when its clientele cut back during the
Great Recession. The chain ran deep discounts and broadened its product selection
to offer lower, entry-level merchandise prices to attract aspirational shoppers
who defected in the greatest numbers when the economy went south.
Now that the
good times are back for many of its shoppers, Saks saw comparable sales increase
10.2 percent in the most recent quarter, the company is adjusting its merchandise
selection from its "good, better, best" mix, as
The Wall Street Journal described it, to include more items in the "best" category.
Saks said it expected comparable store inventory levels to "be up in
in the mid-single digit range throughout the year."
Stephen Sadove, chairman
and chief executive officer of Saks Incorporated, said in a statement, "With
the rebound in the financial markets, the luxury sector has rebounded as well.
We are increasingly optimistic about the future and are pleased that our customers
have responded to our differentiated merchandising, service, and marketing
- Saks Incorporated Announces Results for the First Quarter Ended April 30,
2011 – Saks Incorporated/Business Wire
- Q1 2011 Saks Incorporated Earnings Conference Call – Saks Incorporated
- Saks Makes Shift to Priciest Items – The Wall Street Journal
Consumers Go Shopping – RetailWire
Discussion Questions: Do you expect other luxury retailers to increase comparable store inventory levels along the likes of Saks? Will the mix be skewed to more items in the “best” category, as well?