I marvel at the business of luxury. Through history and today, it works in strange and curious ways that contrast with the behavior of mainstream, non-luxury retail. Nowhere else are you wooed the same way, or find yourself trading numbersÂ with your salesperson. The volumes are so much lower, there’s actually time to chit chat.
My guess is that through a mutual appreciation for a wearable art form, identity associations and affiliations are fluid and formed freely, among shopper, employee, and institution. There is greater attention paid and more efforts taken, which can induce a sort of love you don’t find with say, Zara.
The luxury department store, itself a microcosm of the business, blends the line even further, between straight commerce and community anchor. The people who lead these stores become part of the local scene, partnering with charities and hosting events for academic institutions. Even little New College threw a fashion benefit each year to support its library foundation, in cooperation with Neiman Marcus.
I’ve been especially interested by the late movements of Saks Fifth Avenue. The chain, which competes mostly in the US with stores like Neiman Marcus and Nordstrom, went through a restructuring and purchase by Canadian company Hudson Bay. To realign, it has shuttered nearly a fifth of its US stores in midsize markets over the last eighteen months, including Tampa.
My first reaction to that news was, “why?” Saks left Denver, Portland, Charleston, Orlando, Dallas, San Diego, Austin, Pittsburgh, and suburban Chicago. The obvious answer is they were under-performing locations. This may have gone unnoticed, except that these types of storesÂ tout relationships, and bank on consistency for the trust and loyalty of their local clients.
Here is a map of Saks’Â current or upcoming locations.
In Tampa, it was certainly bruisedÂ the city’s standing in the retailÂ world; for nearly ten years it demonstrated the buying power to support one each of a Neiman Marcus, Nordstrom, and Saks, as well as outposts for global brands like Louis Vuitton, Gucci, Hugo Boss, and Burberry.
You may not notice these changes, but they matter!
Losing our Saks was like losing a friend. I didn’t shop there a lot, but I knew many who did, and I almost went to work there a year before it closed.
There are a couple of trends at work I think are worth noting:
- Saks’ largest market in number of stores is Florida.Â The brand is based physically and from a branding orientation in Manhattan. A new location will open at University Town Center in Lakewood Ranch/Sarasota this fall (about an hour from Tampa, it will replace the brand’s existing Sarasota store); a third Miami-area location, after Dadeland Mall and Bal Harbour, has been announced for Brickell City Center, a multi-use transit oriented development underway in Downtown Miami.
- Off 5th outlet stores far outnumber main-line stores. Saks Off 5th is one of many discount luxury chains that have been accused, at a conceptualÂ level, of deceiving consumers and selling items designed specifically for their stores, of a lower overall quality, rather than unsold mainline-store goods. Neiman Marcus is being sued for this practice.
- Stores vary greatly in size and scope. Sarasota’s existing store at Southgate Plaza is single-story, and carries only a fraction of what the store in Naples carries, which is also oneÂ level. The Naples store, possibly a reflection of the resort town’s wealth, stocks some of the most expensive menswear you can buy. Tampa’s store was two stories, and carried a fuller range than Sarasota, but its stock evolved. At one time, it had both a Chanel and Louis Vuitton store-in-store but they both shutteredÂ during the leaner recession years. Chanel has a similar setup at Neiman Marcus International Plaza.
- Many closed locations were in markets also home to Neiman Marcus and/or Nordstrom. The markets Saks maintains a presence in are either larger period (Los Angeles, Atlanta) or small and lacking either of its competitors (Tulsa, Palm Springs/Palm Desert, Raleigh, Cleveland).
It seems like the brand is consolidating efforts into key markets that are strong overall, or where monopolyÂ opportunities exist. Still, I am always surprised by how specific each store’s stock is tailored to its market. This has an efficiency benefit but it also dilutes the brand’s image, which becomes different things to different people, depending on where they live and shop.
Globally, and in terms of virtual shopping, the luxury industry is under great competition and stress for business. ToÂ diversify and respond to changingÂ middle-class wealth, Saks’ investment in outlets was probably a good short-term business decision. However, anyÂ brand’s cachet, the lifeblood of luxury stores, will inevitably diminish over time without tending to its base.
Rarely can you can’t play both sidesÂ of any coin and not expect to see some repercussions.
Compared to its peers, Saks has lost a bit of its identity. It isn’t the highest-end, or known as the service leader. It isn’t cutting edge either, coming off more as “me too!” than pioneer. Because of the stock inconsistency store-to-store (and online), it feels like a jumble of styles and brands, rather than a unique aesthetic.
Neiman Marcus was never quite as common, sticking primarily to large, established markets. And all of its stores are full-sized. The one in Tampa always seems to be bustling, and it stocks a relatively higher-end spectrum of goods than the Saks did when it was open here.
Nordstrom bases itself in affordable, accessible luxury, but has expanded into pricier offerings, especially online. The Tampa store was renovated recently and nowÂ carriesÂ lines like Prada and Valentino next to Via Spiga and BCBG.
None of this would matter if not for the nostalgia and following Saks has. I regularly peruse the Flickr group dedicated to Saks, which has some amazing historical photos.
Ultimately, it’s still a store, in business to profit. Decisions are made based on a bottom line and a stock price. Only privately-held and individually-risked businesses have the true luxury to evolve around a vision statement and distinct aesthetic.
Others under similar conditions have fared better though, like Barney’s, which is still seen as edgy, picking up fledgling lines long before any of the other department stores. And they’re not without their own missteps. Barney’s has closedÂ its “Co-Op” brand locations and either left markets entirely, or expanded the stores into full-line.
Saks has the history and brand recognition to surviveâ€”it just needs to find the kernel of its identity and extend that through its remaining national and handful of international outlets (UAE, Bahrain, Kazakhstan, and Mexico), pardon the pun.
Saks plans to expand its presence in some of the most important global fashion centers, like New York and Miami, and was one of the first to have an online shop, back in the early 2000s. The question now is how to reconnect with consumers, reclaim them from competitors, and spin off dead weight like its extensive network of outlets.
Just MHO. We shall see.