Saks posts $42.8 million loss in third quarter |
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| Thursday, 20 November 2008 | |
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Upscale department store operator Saks Inc. turned in significantly larger-than-expected third-quarter losses, as business trends at the New York flagship slipped
and women's apparel showed "widespread weakness."
Consumers are "in frozen mode, shell shocked," Saks chairman and chief executive officer, Stephen Sadove said, when the luxury retailer posted a loss of $42.8 million, compared with net income of $21.6 million a year earlier. Net sales for the retailer, which operates 53 Saks Fifth Avenue stores and 49 outlet stores, dropped 12 percent to $698 million in the third quarter. Looking ahead, Saks warned that profit margins would decline in the fourth quarter on big discounts needed to clear out inventory. Sadove said the company's New York City flagship, which accounts for about 20 percent of the business, performed only slightly better than the company average. In prior quarters, the store "meaningfully outperformed" the rest of the company, he said. "During the quarter, the company continued to experience widespread weakness in women's apparel and softness in areas such as women's shoes and handbags that had delivered explosive growth during 2007," Sadove said. |
