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FASHION JOURNAL Saks Gets a Daring Makeover

Saks President Bets on Edgier Labels, Splurges for Women Who 'Have Everything'

Updated April 2, 2014 7:45 p.m. ET

A new boss is giving Saks Fifth Avenue a fashion-forward makeover. Expect top-flight designer looks and service levels—with higher prices to match—as well as black-and-white décor that recalls Saks's midcentury glory days.

Fashions that would have been too daring or expensive for Saks in recent years, such as Burberry Prorsum's hand-painted shearling coats for fall 2014, are being produced in quantities for Saks now. For fall, the retailer expanded its orders of runway clothing and accessories from Chanel, Prada, Gucci, Celine, Saint Laurent, Azzedine Alaà¯a and other leading labels. Safer, more "commercial" styles are being scaled back. "Our customers already have everything they really truly need," says Marigay McKee, Saks's new president. "We really have to offer rarer, more unique things."

Saks Fifth Avenue Gets a Face lift

Saks Fifth Avenue's merchandise has grown blander each year.

But a new boss, imported in January from London's Harrods, is making over the department store chain. WSJ's Christina Binkley reports. Photo: Elizabeth Lippman for The Wall Street Journal

By Christina Binkley

It is a new direction for a store whose merchandise has been bland in recent years. While other luxury department stores have focused on fashion-forward looks, Saks has been known since the 2008 financial crisis for seeking cost-conscious luxury looks and shying away from exotic materials and complex fabrications. But Ms. McKee, an energetic 48-year-old imported in January from London's Harrods, seems not to know the meaning of hesitation. She has pressed Saks buyers to add more emerging designers—a group whose inexperience and often-shaky finances scare off many retailers. Saks recently placed an order with Marco de Vincenzo, a fledgling darling of Milan Fashion Week. In a meeting last week, Ms. McKee asked the company's financial planners to relax their budgeting systems to give more leeway to buyers in the field, who she says must be able to buy fashion based on "passion" and instinct.

"What I was telling them," she says, "is we have to buy from the gut." When fall 2014 clothes—the first full collection since Ms. McKee arrived at Saks—begin shipping to stores in June, the racks will offer more singular looks, with prices rising to more than $20,000 for some coats and dresses. Flashy, rock-n-roll Balmain and urban Alexander Wang have just been added. Saks just added back Balenciaga, after "taking a break" from the pricey, fashion-forward label for several years, says Colleen Sherin, Saks's longtime fashion director. "Pieces that were once icing on the cake really need to be the core of the buy," says Ms. Sherin. "We need more wow."

Men, too, will find more fashionable styles at Saks, which has added the trendy Kenzo and Fendi men's lines and is buying heavily into Givenchy, says Eric Jennings, fashion director for men's and home wares. He says he is spending more time studying labels and trends in Paris and London, where designers tend to be most daring, although Milan, with more classic styles, continues to be a mainstay. More cutting-edge trends such as a darker color palette, mixed-media looks that blend materials such as suede and flannel, studded apparel and accessories will make their way into the men's departments. Saks New boss Marigay McKee is giving Saks Fifth Avenue a fashion-forward makeover.

Elizabeth Lippman for The Wall Street Journal is also going long on a trend with youth appeal: banded-bottom track pants for dressy as well as casual wear. A new department called Sneaks caters to the huge interest in fashion sneakers that range in price from $300 to $1,000 or more. "The colors are aggressive and the prices are aggressive," says Mr. Jennings. "There is zero price resistance." Saks will expand its own private-label apparel and will continue to buy less challenging "commercial" fashions.

"We don't want to alienate the customers we have," says Ms. McKee. The changes will include dropping some labels—though executives declined to name any of them. Saks's look, too, is changing. The flagship New York City Saks sports new black awnings, topiary at the doors, and doormen in black livery. New black-and-white boxes and bags will arrive in coming months. Previously, Saks cycled through color schemes as often as seasonally. Saks, which has some 40 stores, is ordering more of its high-end fashions for its smaller stores, as well as its flagships. Three weeks ago, the stores shifted their purchasing strategy so that buyers are responsible for both stores and online inventory, rather than having separate teams buying for each. This is expected to create more flexibility for Saks to move merchandise around.

Saks, which opened on New York's Fifth Avenue in 1924, was long a leading high-fashion retailer, trying out new directions and carrying high-end fashions from Paris. The name still carries panache, but the chain has catered to broader audiences as it expanded. The 2008 financial crash had a dramatic impact. Caught with huge inventories that fall, Saks began slashing prices by as much as 80% within a few weeks. The move helped pull its rivals into a discounting tailspin, and consumers quickly learned that if they wait a few weeks, fashions were likely to go on sale.

In recent quarters, Saks's price-conscious, discount-based strategy left it posting quarterly losses on relatively flat sales. Meanwhile, rival Neiman Marcus, focused on top-tier luxury, saw its sales and profits grow. When Hudson's Bay Co. agreed to buy Saks last year, a handful of senior executives quickly departed before Ms. McKee's hiring as president was announced. Hudson's Bay Co. will release its results for the fourth quarter on Thursday. Ms. McKee, who has plunged into New York's social scene, is a far cry from the conservative gray-suited men who ran Saks before her. She looks more like a customer, bare-legged in steeple-high heels and designer dresses. She notes that the average Saks client is a 48-year-old woman.

"So I am Mrs. Average," she says. Ms. McKee went to 23 cities in two weeks, visiting Saks's stores, during December. She says she spent two days digging through store archives in "jeans and T-shirt, ponytail, no makeup—on the floor." She found photos of John Lennon and Elizabeth Taylor shopping at Saks and references to Saks firsts such as selling Estée Lauder. She created a new tagline for the company, Live the Legacy, and decided to take the stores back to Saks's graphic black-and-white look, recalling the "glamour of the '50s, '60s, '70s." She stocks a jar of black and white M&Ms in her office. She also intends to restore pomp and circumstance at the cash register. "When I buy a $4,000 dress," says Ms. McKee, "I want it wrapped with care."

Write to Christina Binkley at [email protected]

A Chanel coat. Getty Images

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The transformation of Saks Fifth Avenue under new leadership exemplifies a strategic shift aimed at rejuvenating its brand identity and aligning its offerings with contemporary luxury market trends. Historically recognized for its commitment to high-end Parisian fashions and an opulent shopping experience, Saks faced challenges post-2008 economic crisis, notably falling into a pattern of bland merchandise, discounting strategies, and flat sales. The appointment of Marigay McKee as president, imported from Harrods, signaled a decisive move toward a more fashion-forward, daring approach targeting both existing and new clientele. This leadership change has prompted a comprehensive overhaul of the store’s merchandise, branding, and strategic focus.

A core element of Saks’s rebranding involves shifting away from the “bland” consistency that characterized its merchandise in recent years. Instead, the company is embracing more daring, runway-inspired fashion, emphasizing unique and rarer pieces. This aligns with the broader trend within luxury retail, where the exclusivity and distinctiveness of product offerings are increasingly valued. McKee’s push to include emerging designers, such as Marco de Vincenzo, underscores her commitment to infusing the store with fresh, innovative talent that appeals to fashion-conscious consumers seeking originality. Her approach reflects a risk-oriented buying strategy driven by instinct and passion rather than traditional budgeting constraints, echoing the evolving retail landscape that prizes agility and responsiveness in inventory management.

Simultaneously, Saks is reinvigorating its brand image through aesthetic and experiential reinventions. The introduction of a black-and-white décor scheme, recalling its mid-century glamour, signifies a return to its roots while aligning with modern luxury aesthetics. The physical store redesigns, including black awnings, topiary, and new packaging, serve to reinforce a sense of exclusivity and sophistication. These visual cues aim to attract a clientele that values both heritage and contemporary elegance, catering to the 48-year-old woman predominantly identified as Saks’s typical customer.

Furthermore, product assortment strategies are evolving to include more high-priced, statement pieces—such as coats and dresses exceeding $20,000—and an expanded range of fashionable menswear from labels like Kenzo, Fendi, and Givenchy. The diversification into trends like dark color palettes, mixed-media, and studded accessories indicates a deliberate effort to stay at the forefront of fashion trends, appealing to both younger and established luxury consumers. The expansion of private-label apparel and the launching of new departments like “Sneaks,” catering to the sneaker craze, exemplify a nuanced understanding of modern fashion dynamics and consumer preferences.

Operationally, Saks has adopted a more flexible purchasing strategy, integrating buying efforts across brick-and-mortar and online channels. This holistic approach aims to optimize inventory allocation and responsiveness to market demands, ensuring that stores can adapt swiftly to shifting trends and customer preferences. This is essential in an era where omnichannel retailing has become the norm, and consumer expectations for seamless shopping experiences are higher than ever.

McKee’s leadership highlights a distinctive emphasis on experience and service excellence as integral to Saks’s repositioning. Her personal involvement, from extensive store visits to creating a refined, glamourous store environment, underscores her commitment to an elevated customer experience. This aligns with the broader luxury retail imperative that combines high-quality product offerings with memorable service interactions. The emphasis on wrapping dresses with care and restoring pomp at checkout exemplifies her focus on the tactile and emotional aspects of luxury shopping.

In conclusion, Saks Fifth Avenue’s strategic overhaul under Marigay McKee exemplifies a broader industry trend toward blending heritage with innovation. By focusing on daring fashion, aesthetic reinventions, flexible operations, and elevated customer service, Saks aims to re-establish its dominance in the luxury retail space. This case underscores the importance of bold leadership and strategic agility in navigating the rapidly evolving luxury market landscape, ensuring Saks remains relevant and appealing to contemporary consumers seeking exclusivity, fashion-edge, and personalized experience.

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