Saks, Inc.
| Company type | Public (formerly) |
|---|---|
| Industry | Retail |
| Predecessor | Proffitt's, Inc. and Saks Fifth Avenue |
| Founded | 1998 |
| Fate | Acquired by Hudson's Bay Company in 2013 |
| Headquarters | New York City , United States |
Key people | Stephen Sadove (Chairman and CEO), Kevin Wills (CFO) |
| Products | Department stores, luxury retail |
| Parent | Hudson's Bay Company (from 2013) |
Saks, Inc. was a U.S.-based holding company formed in 1998 through the merger of Proffitts, Inc. and Saks Fifth Avenue. Before being acquired in 2013 by the Canadian retailer Hudson's Bay Company (HBC), Saks, Inc. managed several regional department store chains such as Carson's, McRae's, Parisian, and Proffitt's, in addition to its premier New York City flagship, Saks Fifth Avenue. During the 1990s, the company pursued growth by purchasing mid-tier and specialty department stores but later concentrated on upscale retail, divesting non-essential properties by the mid-2000s.
At the time of its acquisition, Saks, Inc. operated a total of 46 full-line stores and 69 off-price outlets throughout the United States as well as in international locations including Bahrain, Mexico, Saudi Arabia, and the United Arab Emirates. In 2013, the firm reported revenues of US$3.147 billion, with operating income amounting to US$138.49 million and net income reaching US$62.88 million. The corporate headquarters were situated in New York City, with Stephen Sadove serving as Chairman and CEO and Kevin Wills as CFO.
Following the acquisition, HBC maintained the Saks Fifth Avenue brand through its luxury full-line stores, the off-price Saks Off 5th locations, and introduced the coworking space concept SaksWorks. This strategy preserved Saks’ presence in high-end retail while broadening its business scope into new service sectors.
Operations during 20th century
Saks, Inc.’s origins trace back to five Proffitt's stores located near Knoxville, Tennessee. After going public on NASDAQ in 1987 under the ticker PRFT, Proffitt's expanded rapidly by acquiring 18 Hess's stores in 1989 across Tennessee, Virginia, Kentucky, and Georgia. Between 1994 and 1998, it further grew by purchasing McRae's, Younkers, Parisian, Herberger's, Carson Pirie Scott, Boston Store, Bergner's, along with additional locations from Loveman's, Parks-Belk, and Brody's brands—integrating them into existing operations. Following the acquisition of Parisian, Proffitt's relocated its headquarters to Birmingham, Alabama in 1997. Although Saks no longer runs stores in Mississippi today, it continues to operate data services from the former McRae’s headquarters based in Jackson.
1998 acquisition of Saks Holdings
In September 1998, Proffitt’s acquired Saks Holdings Inc., which owned the luxury retailer Saks Fifth Avenue, leading to a rebranding as Saks, Incorporated. This deal incorporated not only Saks Fifth Avenue but also Off 5th outlets along with Folio mail-order and Saks.com e-commerce platforms.
The company organized its business into two main divisions: Saks Fifth Avenue Enterprises and the Birmingham-based Saks Department Store Group. The department store segments were divided into Southern Department Store Group (including McRae’s and Proffitt’s), Northern Department Store Group (comprising Bergner’s, Boston Store, Carson Pirie Scott, Herberger’s, Younkers), Specialty Department Store Group (Parisian), and Saks Fifth Avenue Enterprises (covering Saks Fifth Avenue and Off 5th).
Operations during 21st century
By 2001, Saks had achieved $6.6 billion in revenue and secured a position on the Fortune 500 list as a prominent U.S. department store operator. The headquarters were moved to Midtown Manhattan in 2007.
In 2005, allegations surfaced accusing Saks of improper chargeback practices against vendors; subsequent SEC investigations uncovered methods that artificially boosted earnings by as much as 43%, recovering nearly $30 million unjustly from suppliers over a seven-year period. As a result of these findings, Saks reached a settlement with the SEC in 2007 and dismissed several implicated executives. Earlier that same year, financial statements dating from 1999 through the third quarter of 2004 were restated due to accounting inaccuracies related to operating leases.
Refocusing on luxury retail centered around Saks Fifth Avenue, the company divested its combined portfolio of 47 Proffitt’s and McRae’s stores to Belk for approximately $622 million in July 2005. Later that year, it sold its Northern Department Store Group—which included Carson Pirie Scott, Bergner’s, Younkers, Herberger’s, and Boston Store—to Bon-Ton Stores for $1.1 billion; this transaction was finalized in March 2006.
In August 2006, Saks disposed of its portfolio of 38 Parisian stores along with two distribution centers and its Birmingham corporate headquarters to Belk; these locations were rebranded under Belk by late 2007.
On November 5, 2008, Saks announced it would shut down Club Libby Lu due to ongoing unprofitability.
2013 Acquisition by Hudson's Bay Company
On July 29, 2013, the Toronto-headquartered Hudson's Bay Company completed the purchase of Saks, Inc. for $2.4 billion USD. This acquisition strategically incorporated Saks Fifth Avenue and Saks Fifth Avenue Off 5th into Hudson's Bay's existing brand lineup, which includes Hudson's Bay, Home Outfitters, and Lord & Taylor, thereby strengthening its footprint within the upscale retail sector.
List of Department Stores
| Name | Year Founded |
Year Acquired |
Year Divested |
Notes |
|---|---|---|---|---|
| Bergner's | 1889 | 1991 | 2006 | Transferred to Bon-Ton |
| Boston Store | 1897 | 1998 | 2006 | Divested to Bon-Ton |
| Carson Pirie Scott | 1854 | 1998 | 2006 | Sold off to Bon-Ton |
| Club Libby Lu | 2000 | Template:N/A | 2009 | Brand discontinued by Saks, Inc. |
| Herberger's | 1927 | 1997 | 2006 | Ownership transferred to Bon-Ton |
| McRae's | 1902 | 1998 | 2005 | Acquired by Belk through sale |
| Parisian | 1877 | 1996 | 2006 | Sold to Belk |
| Proffitt's | 1919 | Template:N/A | 2005 | Ownership passed to Belk via sale |
| Saks Fifth Avenue | 1867 | 1998 | Template:N/A | Became part of Hudson's Bay Company in 2013; flagship luxury brand |
| Saks Fifth Avenue Off 5th | 1990 | 1998 | Template:N/A | Included in Hudson's Bay Company portfolio in 2013; off-price division |
| Younkers | 1856 | 1996 | 2006 | Sold to Bon-Ton |