Saks dep't stores seek to differentiate

By Andrea Lillo -- Home Textiles Today, 6/23/2003 12:00:00 AM

NEW YORK —

Proprietary product now makes up more than a quarter of the merchandise at Saks Inc.'s Saks Department Store Group in its efforts to combat the issues, such as sameness of product, the department store industry has been facing. The division will also compete with the discounters on certain branded products.

Speaking at Credit Suisse First Boston's Retail, Apparel, Food/Drug, Restaurant and REIT conference, Brad Martin, chairman and ceo, said that merchandise differentiation includes procuring merchandise from unique vendors, selections from emerging suppliers or exclusive product from core vendors. The private-label programs, which were at 17 percent two years ago, now account for 26 percent of the overall assortment.

One such program in the home area is its exclusive agreement with Jane Seymour, who has "an enormous following in the United States," he said. "Consumer interest is extraordinary," and the program has begun to hit the stores.

It has also addressed pricing issues, and 15 percent to 20 percent of its branded merchandise that is also available through the mass channel will be competitively priced. "We will not be undersold on products of that nature."

Battling "pricing confusion," SDSG has also simplified prices, he said, and its "Incredible Value" program consists of merchandise that is always priced consistently on the floor.

The division has also targeted more localized marketing, relying less on newspaper ads. In response to Federated's combining of the Rich's and Macy's nameplates in the Atlanta area, Saks held an aggressive marketing campaign this past spring.

Martin also addressed Saks' entry into lifestyle centers in the suburbs to counter the minimal amount of mall growth. Many big box and mass retailers have already tailored their formats to capture marginal share in these markets with freestanding stores, he said, and over the past two to three years, Saks has entered these areas as well. Its Parisian, McRae's, Carson, and Herberger's divisions each have two stores in these centers, while Bergner's has three and Boston Store has one.

"It's an opportunity to grow square footage and increase our market share in and around markets where we have a very strong existing presence," he said, though he stressed that the regional mall is and will remain a very important form of distribution.

Its Saks Fifth Avenue division has entered new categories, such as decorative home furnishings, though this is strictly a "true gift-oriented assortment," said Martin. SFA is "not going to be a textiles house; we're not going to be the place to get bedding and towels."