It’s not news that the 1998 acquisition of Saks Fifth Avenue by regional department store chain Profitt’s Inc. has been an expensive misadventure.
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Only a few years after the deal, Saks Inc., the renamed company based in Birmingham, Ala., admitted that its regional department stores weren’t a good fit with tony Saks Fifth Avenue.
Saks Chief Executive Brad Martin tried to split the company in two, but the stock market wasn’t buying the plan and the spinoff went nowhere.
So the two parts of the company have soldiered onward together, but the results haven’t been pretty. Sales were flat in 2000 and down 4.5 percent in 2001.
Meanwhile, Saks’ shares have lost more than 60 percent of their value during the past five years, greatly outpacing the decline in the Dow Jones industrial average.
Saks has been taking steps to get its business under control. It has consolidated regional headquarters and reined in growth plans. But now comes a really drastic move: The company announced this week it will close its Saks Fifth Avenue store in Oakbrook Center after the holidays.
The space will be taken over in February by Federated Department Stores Inc. and remodeled into a Bloomingdale’s home store that will open in fall 2003.
Saks President Christina Johnson said the move was “consistent with our focus on improving our returns on capital.” In other words, the store wasn’t making money.
But we have to wonder, if Saks Fifth Avenue can’t make it in the upscale western suburbs of Chicago, where can it prosper?
After the closure, Saks will have three stores in the Chicago area: Highland Park, Old Orchard mall in Skokie and its Michigan Avenue flagship.
A tip of the hat: Being nominated is an honor, of course, but winning is a lot more fun. That’s why members of Chicago’s Millinery Arts Alliance are celebrating their recent crowning as Victoria magazine’s 2002 Entrepreneurs of the Year.
Rather than competing with each other, the group of custom hatmakers banded together in 1995, sharing costs for things like mailings, hat boxes and special events.
The millinery alliance won out over 37 other contestants, based on votes by readers.
“The woman at Victoria said we got an overwhelming response,” said Loreta Corsetti, a Chicago hatmaker who heads the MAA along with Highland Park milliner Lisa Farrell.
“Women said it was nice to read about women working together for one goal,” Corsetti said.
The timing couldn’t be better. The hat group kicks off a weekend of events Nov. 14 with an opening night soiree at the Brasserie Jo restaurant in River North. It continues Nov. 16 with a presentation of special collections at the Ooh-La-La hat shop in downtown Highland Park and concludes Nov. 17 with a hat tea at the Drake Hotel’s Palm Court.
Gatherings: More than 1,000 Midwest college students will gather at the Holiday Inn Mart Plaza on Nov. 15 to hear about professions in retailing and fashion design at a career day sponsored by Fashion Group International.
The event’s kickoff speaker will be Lynn Emmolo, general manager of Aura Science, the new beauty brand created through a joint venture between Shiseido of Japan and Limited Inc.
Other speakers will include Georgia Shonk-Simmons, chief executive of Coldwater Creek, and Nick Graham, “chief underpants officer” of Joe Boxer.
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Starting next week, Inside retailing moves to Wednesday.