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SAKS FIFTH AVENUE TO ACCELERATE GROWTH STRATEGY;

 SAKS FIFTH AVENUE TO ACCELERATE GROWTH STRATEGY;
 -- Expansion Plans, Broadened Financial Base and Management
 Structure Announced
 -- Moves To Capitalize on Retail Market Conditions
 -- Miller Named To New Position As Chief Operating Officer
 -- $300 Million Added to Organization's Equity
 NEW YORK, Feb. 26 /PRNewswire/ -- Saks Fifth Avenue, one of America's premier retailers, disclosed today that it is "moving aggressively and opportunistically into a growth phase," and will accelerate the development of its business.
 In a letter to Saks associates, Melvin Jacobs, chairman and chief executive officer, said: "We are in a excellent position to take advantage of the unique opportunities presented by the present retail environment and our particular competitive strengths.
 "We have decided, therefore, to accelerate our growth strategy through (1) the opening of new stores; (2) the opening of replacement stores within existing markets; (3) the opening of more resort stores; (4) the opening of additional clearance centers; (5) the introduction of new specialty stores; (6) major store renovations; (7) growth in our Folio catalogue business; (8) the expansion into international markets; (9) increasing our already powerful merchandising push; and (10) enhancing our financial structure by continuing to deleverage the company's balance sheet."
 Jacobs' letter identified several areas that highlight the plan, including:
 -- Investing more than $250 million in new stores, renovations and infrastructure improvements;
 -- Developing and expanding the "headquarters store" concept;
 -- Expanding customer development and retention with programs such as "Saks First," a recognition and reward program for top customers;
 -- Building more dominant classifications and brand names and building dominance in special categories; and
 -- Expanding new retailing formats such as "store-within-a-store" concepts (e.g., Armani A/X; Salon Z; SFA Shoe/Accessories), resort stores and clearance centers.
 Jacobs also noted that "To succeed in this phase, just as we succeeded over the past 18 months since Saks became a stand alone organization, we have put in place the necessary ingredients -- management experience, depth and the financial wherewithal -- to move ahead.
 "As we enter a growth phase, much is dependent upon our ability to focus our merchandising and infrastructure on our target customer. We can work closely with key vendors to offer dominant and differentiated assortments; we can bring our dominant store position to new markets while expanding market share in present regions; and we can add new concepts and formats.
 "To maximize the benefits of these operating advantages, we are naming Philip Miller, who joined the company in 1990, to the position of chief operating officer. Currently vice chairman, responsible for merchandising, marketing and new ventures, effective with his appointment to this new position, he will have all operating units in the organization reporting directly to him," Jacobs said. Miller will report to Jacobs. Arthur Martinez, who also joined Saks in 1990, will continue in his position as vice chairman responsible for financial, administrative and operations functions.
 "Our plan for the future is opportunistic, aggressive but clearly achievable," Jacobs said. "Just as we succeeded in reorganizing, developing strategies and tactics to prosper in a weak economic environment and in building a strong financial base over the past year and a half, our goals for the future take advantage of the present competitive landscape, which offers us the opportunity for highly profitable expansion and market share gains.
 "This ambitious growth program will take money. To that end, we are pleased to report that Investcorp, which represents the major group of our investors, sees the opportunity the same way we do. They have both encouraged us to move ahead full speed and have backed that commitment by arranging for the contribution of $300 million of new equity to Saks. These funds will be used to support our growth strategy and prepay debt, at that very time when some of our competitors are experiencing capital and cash flow problems," he said.
 "Additionally, the expansion of our equity enables our banks to reclassify their loans to us as non-HLT (highly leveraged transactions). This new equity capital should also allow us to continue to receive preferential treatment from our banks and the concomitant reduction in our interest rates," Jacobs said.
 Saks was founded by Horace Saks and Bernard Gimbel who opened the flagship store in New York City in 1924. Saks was acquired in 1973 by BATUS, Inc. the American holding company of London-based B.A.T. Industries, p.l.c., and in 1990 was purchased by an international investor group, arranged by Investcorp, and Saks management. Saks currently operates 48 fashion specialty stores in 22 states.
 -0- 2/26/92 R
 /CONTACT: Arthur C. Martinez of Saks Fifth Avenue, 212-940-4175, or Lawrence A. Rand of Kekst and Company, 212-593-2655 for Saks/ CO: Saks Fifth Avenue ST: New York IN: REA SU:


TS -- NY013 -- 2829 02/26/92 13:04 EST
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Publication:PR Newswire
Date:Feb 26, 1992
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