MarketWatch  Sep 29  Comment 
Hudson's Bay Co. , the Canadian retail group that includes Lord & Taylor and Saks Fifth Avenue, announced a realignment of its North American operations it says will result in a $20 million charge for the third quarter of fiscal 2015. The...
The Economic Times  Sep 29  Comment 
"SKS Microfinance Ltd is a 'SELL' call with a target of Rs 363 and a stop loss of Rs 394"
The Economic Times  Sep 28  Comment 
"SKS Micro is a 'SELL' call with a target of Rs 366 and a stop loss of Rs 390"
The Hindu Business Line  Sep 23  Comment 
SKS Microfinance aims to stick to 50% annual growth prediction
The Hindu Business Line  Sep 23  Comment 
SKS Microfinance has announced a 1.25 per cent reduction in the interest rate charged to borrowers from 22 per cent to 20.75 per cent with effect from October 1, 2015, for all future disbursa...
The Economic Times  Sep 21  Comment 
The landscape for SKS Microfinance has changed completely, but not getting a bank licence is not the end of the world, says Irani.
The Economic Times  Sep 21  Comment 
'SKS Microfinance Ltd. is a 'BUY' call with a target of Rs 401 and a stop loss of Rs 346'
The Hindu Business Line  Sep 20  Comment 
SKS Microfinance not receiving a small finance bank licence will not weaken its competitive position as the micro lender enjoys a 300-400 bps funding cost benefit over smaller MFIs, says a report.
The Economic Times  Sep 19  Comment 
Probably, the growth outlook for MFI businesses look very uncertain; the space will be more crowded going forward, says Agarwalla.
The Economic Times  Sep 18  Comment 
'You should buy it only bargain'


Saks Incorporated (NYSE:SKS) sells luxury apparel, shoes, jewelry and accessories in the U.S. through its Saks Fifth Avenue (SFA), Saks Fifth Avenue Off Fifth and Club Libby Lu (CLL) stores. In fiscal 2010, SKS posted net sales of $2.786 billion and net income of $47.85 million.[1]

Saks—and most other luxury goods retailers—are relatively shielded from trends such as rising oil prices because it targets a lower-income demographic; however, luxury consumption exaggerates more fundamental up and down swings, typically rising and declining at a faster rate than the overall economy. Due to healthier U.S. economic conditions, Saks made profits in fiscal 2010, compared to losses suffered in 2008 and 2009.[1]

Company Overview

Saks owns and operates luxury retail stores, selling high-end fashion apparel, accessories and furnishings to its traditionally middle-aged, higher-income female customers.

Business Segments

The Saks, OFF 5TH and Saks Direct businesses are aggregated in one business segment.[1] SKS product categories are listed below:

  • Women's Apparel: 37.5% of Fiscal 2010 net sales.[1]
  • Accessories: 18.9%
  • Cosmetics: 12.1%
  • Men's Apparel: 15.2%
  • Women's Shoes: 12.8%
  • Other: 3.3%

Geographic Presence

Most of Saks stores are in the U.S., but the company does have SFA stores in Riyadh, Saudi Arabia; Dubai, United Arab Emirates, Mexico City, Mexico, Kazakhstan, and Shanghai, China.[1]

Business Growth

Fiscal 2010 (ended January 29th, 2011)

As a whole, SKS had a rebounding fiscal 2010 compared to their net losses in 2008 and 2009.

  • Net sales increased 5.9% to $2.786 billion.[1]
  • SKS posted net income of $47.85 million, compared with a $57.9 million loss in fiscal 2009.[1]

Trends and Forces

Luxury retail exaggerates swings in economic cycles

While luxury goods consumption is well-insulated from trends such as rising oil prices, the industry is sensitive to longer-term changes in economic cycles, as luxury goods exaggerate up and down swings. During a boom, consumers' demand tends to increase faster than the growth rate of economies while slowdowns can lead to rapid declines in sales. Reduced demand for luxury items might induce the company to take inventory markdowns or offer discounted items, which detract from the cache of expensive items.

Tourism drives 20% of sales

A substantial number of Saks’ department stores are actually not in tourist markets, including the flagship SFA store on Fifth Avenue in New York City, and approximately 2.43% of the company’s annual sales come from tourists. Global instability, such as terrorist activity would discourage tourism. Furthermore, many tourists take advantage of the U.S dollar’s weakness in relation to other currencies when buying from Saks; a strengthening of the dollar may discourage tourist business for the company. While most of its stores are in the U.S., the company does have SFA stores in Riyadh, Saudi Arabia, Dubai, United Arab Emirates, but not Mexico.

High dependence on fashion trends

Much of success in the retail business depends on the company’s ability to predict and anticipate consumer tendencies as order agreements are made months in advance of sales to consumers. Consequently, if the company inaccurately predicts consumer preferences, it could face lower sales, an overflow in inventories and lower profit margins—all of which would adversely affect the company’s financial health.


The luxury retail market has become increasingly competitive, and Saks’ prime competitors include Neiman Marcus (privately held), Nordstrom (JWN), Bloomingdale’s, and Barney’s (privately held), all of which offer comparable merchandise and cater to a customer demographic that earns roughly $175,000 to $200,000 a year, though Nordstrom targets a slightly less affluent average customer.

  • Saks (SKS) merchandise is dominated by apparel, which constitutes about 55% of the total assortment
  • Nordstrom (JWN) derives a sizeable portion of sales from shoes
  • Bloomingdale’s derives a high portion of its revenue from home goods.


  1. 1.0 1.1 1.2 1.3 1.4 1.5 1.6 SKS 2010 10-k
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