Saks Fifth Avenue Company Profile & SWOT PDF

Preview

Summary

Pay close attention to your SWOT...

Description

SAKS FIFTH AVENUE

1

Saks Fifth Avenue Company Research Project Lexy Lopez AM 492

SAKS FIFTH AVENUE

2

Table of Contents Company Profile…………………………………………………………………………………………………..3 Business News……………………………………………………………………………………………………..5 SWOT…………………………………………………………………………………………………………………..5 2015 Annual Finance……………………………………………………………………………………………6 Conclusion…………………………………………………………………………………………………………...7 Reference…………………………………………………………………………………………………………….8

SAKS FIFTH AVENUE

3

Company Profile History In the early 1900’s,Horace Saks and Bernard Gimbel, owners of individual retail stores, wanted to created unique specialty store that would combine fashionable with grace. They opened their dream store on 49th and 50th Street on upper Fifth Avenue. Saks Fifth Avenue is known as the first department store that originally started on primary residential district. Merging Saks Fifth Avenue corporately is called Saks & Company. In 1973, Saks & Company was acquired by BATUS. By the early 1990’s, Saks & Company was operated by a new Chief Executive Officer, Philip B. Miller. Miller’s idea was to open Saks first outlet store called Saks Off 5th in Franklin Mills, Pennsylvania. The next goal for Saks & Company was to become public in 1996 with 16 million shares outstanding. The company is traded on the New York Stock Exchange under symbol “SKS”. But in 1998, Saks and Company merged with Proffitt’s Incorporated and had to change from Saks & Company to Saks Incorporated. Their owner changed again in 2013 by Hudson’s Bay Company (HBC). Saks Fifth Avenue is now incorporated with Hudson’s Bay, Lord & Taylor, Gilt, and Home Outfitters. Stores Saks Incorporated is both Saks Fifth Avenue and Off Fifth. Saks Fifth Avenue is one of the top United States department stores. Known for its luxury designers and absolute consumer service; Saks has been a halo ground for designers and luxury consumers. Saks Off Fifth is Saks Fifth Avenues discount or clearinghouse that offers similar merchandising at lower prices. Saks Fifth Avenue own by Hudson Bay Company operates 42 Saks Avenue Store

SAKS FIFTH AVENUE

4

both domestic (34) and international (8), and 72 Saks Off Fifth stores. Operating total stores at 113 internationally and domestically. Sakes Fifth Avenue and Saks Off Fifth have online stores for consumers to also shop online. Competitors Saks Fifth Avenue as both upscale luxury departments store and discount clearinghouse has competitors that could harm their financial strategies. Competitors for Saks Fifth Avenue are Nieman Marcus, Bloomingdale’s, Barneys, and Nordstrom. Saks Off Fifth competitors are those large department stores discount stores like Nordstrom Rack, Neiman Marcus Last Call, Bloomingdales online outlet. Target Market Saks seeks to inspire women, men and children with an upper middle class to wealthy socioeconomic status. They are individuals and families that like to spend large amounts of their money on high quality and designer labels. Men and women clients of Saks Fifth Avenue enjoy the sophisticated lifestyle. Product Assortment The clientele of Saks Fifth Avenue has multiple options to purchase mix product assortments with Saks brick-and-mortar store or online. On both locations, Saks Fifth Avenue offers an assortment of different product categories for their target markets. For their men and women’s collection they offer apparel, shoes, handbags, accessories, and cosmetics. In the children’s product category they offer a limited amount as compared to men and women’s, but they offer apparel, shoes and accessories. Saks Fifth Avenue likes to offer more than just the typical specialty store and offers home and gourmet. In this category they offer home décor, bed & bath, dining, gourmet food, kitchen, tech & accessories, travel & luggage, and finally pet accessories. In only two brick-and-mortar locations, Saks Fifth Avenue offers a bridal salon for men, women and children.

SAKS FIFTH AVENUE

5

Business News 2016 Saks dazzles Sherway shoppers; Debut of first Canadian stores at Eaton Centre. The opening of the Toronto Eaton Centre store was massive. It might be the company’s most successful store opening ever. (Kopun, 2015) Saks first into fresh battle for luxury buck shopping in luxury; high-end department stores have set sights on GTA this year, with several on way. (Saks, 2016) 2015 British boss of Saks Fifth Avenue to leave; Marigay Mckee, one of the most influential figures in the fashion industry, to leave department store after barely a year in charge. Mckee originally from Harrods, but has fallen victim to a management shake-up. (Milligan, 2015) Saks head wants shopping to be a spectacle; ‘you can’t do that online’. Saks, Mac Metrick, stated that he wants his customers to say “thank you, I got it at Saks’. The company wants to offer to their fifth avenue client club free personal shopping service and changing their salon to a new customer. (Tabuchi, 2015) 2014 Hudson's Bay Company and its wholly-owned subsidiary Saks Fifth Avenue announced today plans to open a full-line Saks store in San Juan, Puerto Rico. The approximately 100,000 square-foot, multi-level Saks opens March 26, 2015 in the Mall of San Juan. (Majesti, 2014)

SWOT For my SWOT analysis, I looked at Saks’ overall strength, weakness, opportunities and threats. After reading some business news of recent years, I found that Saks’ could make some changes to increase their company brand image but to also expand in their market. Theses are only my input of the company business strategies. Strength  Well known and established brand  Luxurious brand image because of high quality products  High level of customer loyalty  Strong multi-channel platform  Becoming more innovative with technology  Very sharp product image Weakness  Customer service is lacking  Bland design selection available in stores  Online pricing not consistent with in store pricing

SAKS FIFTH AVENUE

6

 Lacking in strong brick-and-mortar stores  Possibility too many off 5th Avenue stores Opportunities  Expand and improve their product development  Global present could be further  Expand more to international markets, only 8 now  Product collaboration with outside sources  Finding better employees  Work closely with HBC for advice Threats  Market demand is often based on current economic state  Many competitors such as Neiman Marcus are finding ways to captivate market before Saks  Rising cost in shipping, raw materials, labor or taxes in the future Financial Components Saks Fifth Avenue financial reports was difficult to find because since 2013, Hudson’s Bay Company decided that they want to send there annual reports only to financial investors and shareholders. But if someone wanted to see the financial comparison, they had to go on Hudson’s Bay Company website and look that the corporate level only. I did find Saks’ annual report of 2014, so here are there number. According to my chart and Saks’ charts, the company has been steady with gross income. Even though sales have increased 2 to 3 billion in 2012 to 2013, the company has been increase cost of goods sold. When you look at Saks’ margin, it basically is the same but net income has increasing. The second chart in the paper is the change between 2014 and 2013 of Saks net income. I thought it would be interesting to figure out exactly what the change is from the net income. According to my calculation, the company has experienced a change of 1.37% from 2013 to 2014. Overall, this could be beneficial for the company but if the company expects to have further increases in the future, they might have to start changing something to keep them a head in the department store market. In the third chart, I created a bar graph to help demonstrate the differences of Saks Fifth Avenues net income. I feel that it is important to understand a company’s net income to see how overall they are benefiting from every year business. 2012 2013 2014 Sales/Revenue $2,785,745.00 $3,013,592.00 $3,147,554.00 COGS $1,668,487.00 $1,785,419.00 $1,869,874.00 Gross Income $1,117,258.00 $1,228,173.00 $1,277,680.00 Margin 40.11% 40.75% 41.00% SG&A expenses $715,951.00 $767,635.00 $810,733.00 Net Income # Of stores

$401,307.00

$460,538.00

$466,947.00 42

SAKS FIFTH AVENUE

7

Sales/stores # Of employees Sales/employees

Net Income

$74,941.76 158,900 $19.81

2014 $466,947.00

2013 $460,538.00

Change 1.37%

Conclusion For the most part Saks Fifth avenue has been successful lifespan thus far but it can agree upon that there is always room for improvement. Saks Fifth Avenue continues to seek out international stores to push expansion and growth every year. The innovation behind the company is a key ingredient to their consistent success. If Saks can continues to grow their Omni-channel and asking for help from Hudson’s Bay Company, Saks should be finding themselves in a better situation in the next couple years.

References

SAKS FIFTH AVENUE

8

Kopun, F. (2016, February 23). Saks to dazzle Sherway shoppers. Retrieved May 3, 2016, from http://www.lexisnexis.com.ezproxy2.library.colostate.edu:2048/ hottopics/lnacademic/ Majesti, Katie. "Saks Fifth Avenue to Open New Store in Puerto Rico." Press Release Distribution, EDGAR Filing, XBRL, Regulatory Filings. Lexis Nexis, 13 Sept. 2014. Web. 03 May 2016. Milligan, L. (2015, April 07). What's Next For Marigay? Retrieved May 03, 2016, from http://www.vogue.co.uk/news/2015/04/07/marigay-mckee-leaves-saksformer-harrods-fashion-director Tabuchi, H. (2015). Saks Is Shaking Off Retail Gloom With a Fifth Avenue Face-Lift. Retrieved May 03, 2016, from http://www.nytimes.com /2015/11/15/business/saks-is-shaking-off-retail-gloom-with-a-fifth-avenueface-lift.html?_r=0 Saks Annual Report. Form 10-K. (2014). Retrieved May 03, 2016, from http://www.sec.gov/Archives/edgar/data/812900/000119312513117079/d5 03467d10k.htm Saks first into fresh battle for luxury. (2016, February 13). Toronto Star, p. B3. Retrieved May 3, 2016, from http://www.lexisnexis.com.ezproxy2. library.colostate.edu:2048/hottopics/lnacademic/ Secondary Navigation. (n.d.). Retrieved May 03, 2016, from http://www.saksoff5th.com/about-us-saks/about-us-saks.html?sre=footercopy_10...