Saks plans to close two stores and increase gross profit margin in the others

If ever there was a plan devised to fail, the Saks concept to ride the poor economic trend seems doomed. Mass retailers can play with gross profit margin because their price driven customers will tolerate the end results. How is Saks going to get higher gross out of designer brands?


 Convince the Designers to sell it to them for less? Don’t think so.

 Invent their own private label with price points equal to current designer names? That’s one way if they have a design staff to create the line, and that cost is not cheap.

 Cut the quality of the manufacturing to insure higher GPM? Not going to get away with that because their customers will not tolerate it and will see it coming from a mile away.


I just hope that Saks, which has always been a retailer to respect and emulate, can focus on the business and cut overhead, hire superior staff who can drive sales, redo the stores so they are energy efficient  and realize the solution is not in the product. Their product is not broken, so why fix it.


They are playing in the highest level of retail and need to find a way that the customer cannot see the cost savings while walking the sales floor. We need Saks and I hope they see they might have taken the wrong turn in the road.


Jerry Birnbach F.I.S.P.

Partner RDD Associates Inc. Store Designer NYC

Retailers for a better tomorrow blog

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