Saks Fifth Avenue Stays the Course on Luxury
The luxury market may be floundering but don't look for Saks Fifth Avenue to go down market any time soon. In an interview with MarketWatch, Saks chief executive Steve Sadove said that he is going forward with plans to renovate the company's stores, spending a projected $150 million. He is also committed to luxury brands, expanding the distribution of top-tier labels such as Chanel and Gucci, a brave move at a time when the brands that are desired most by aspirational consumers might be vulnerable to the biggest hits. Consumer confidence among luxury consumers is at an all-time historical low. Unity Marketing's Luxury Consumption Index has shown that more than two-thirds of those with an average income of $155,700 believe the economy is in trouble. Sadove, however, is looking beyond this year hoping that his strategy will pay off in the long run. You may find some particularly helpful salespeople in Saks too, part of Sadove's strategy is to have as much as 90% of the Saks sales staff working on commission, up from about 50% three or four years ago.