Saks Plans $250-Million Store Expansion Program
NEW YORK — Saks Fifth Avenue said Wednesday that it will spend $250 million over the next five years to build a handful of new stores as well as spiff up and expand existing outlets.
The retailer said the plan will be backed by $300 million in new equity from Investcorp, the group that helped take Saks private in 1990.
The money will be used to “support the growth strategy and prepay debt,†the company said.
The Saks announcement was an unusually good piece of news in the retail business, where prevalent developments of late have been anemic sales, cutbacks and bankruptcies due to the recession.
The announcement coincided with word on the discount end of the retailing spectrum that McCrory Corp., an operator of five-and-dime stores, had sought bankruptcy protection because of pressing debts and an especially weak Christmas selling season.
It also came exactly one month after New York’s R. H. Macy & Co., one of the most famous retailing names, sought bankruptcy protection because it was overwhelmed by debts and a sales slowdown.
Saks will open four to six new stores, relocate as many as five stores and renovate other outlets over the next five years.
Saks also disclosed plans to expand its Folio catalogue business and move into international markets that it didn’t identify further.
Analysts were not particularly surprised by the announcement. “A lot of Saks stores got to look awfully tired,†said Jeffrey Edelman, an analyst with C. J. Lawrence Inc.
Saks operates 48 stores in 22 states, including California. The retailer’s flagship New York store opened in 1924.
The company, acquired by Batus Inc. in 1973, went private in a management-led buyout in 1990.
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