E-commerce investment lowers Saks’ results

Last September’s launch of Saksfifthavenue.com helped pull down earnings for the quarter and the year at Birmingham, Ala.-based luxury department store retailers Saks Inc. The company this week reported net income for the fourth quarter ended Feb. 3 of $55.3 million, compared to $120.5 million last year, and net income for the year of $75.5 million, compared with $189.9 million last year. Pre-tax e-commerce losses covering the company’s investment in the web site launch totaled $11.6 million for the fourth quarter and $33.2 million for the year. By contrast, the pre-tax e-commerce loss for the fourth quarter and year ended Jan. 29, 2000, was $2.4 million and $4.2 million, respectively. Net sales for the quarter were $2.1 billion and for the year $6.6 billion, up from $2 billion and $6.4 billion, respectively. Also affecting results was the yearend write-off of goodwill associated with the company’s sale of nine stores to the May Company. Besides 62 Saks Fifth Avenue Stores and the web site, results included the company’s Saks outlet stores, catalog operations, and more than 250 traditional department stores including Carson Pirie Scott and the Boston Store.