Saks brings saks.com back into the fold, drops catalogs
The early days of web-based retailing witnessed the spinning off of dot-com subsidiaries from bricks-and-mortar parents. Today’s reality is something different: The parents are bring the children back into the fold. The latest: Saks Inc., best known for its upscale department and fashion stores, is integrating saks.com into the core Saks Fifth Avenue store business. In addition it is eliminating the Folio and Bullock & Jones catalogs.
“Our strategy a year ago was to build capability to create a business on-line, as opposed to merely the exploitation of this communication medium to drive our core business,” said R. Brad Martin, chairman and CEO of Saks. “We clearly recognize now that the on-line market is not of a sufficient size at this time to justify the substantial investment involved in this separate structure. We will thus integrate the saks.com operation with the Saks Fifth Avenue stores organization. This will assure product congruence and will leverage existing inventory, management, and the merchandising and marketing staffs. Additionally, we expect to web-enable our Store Books next year, which should result in additional savings and incremental revenue."
Martin said Saks remains committed to a multi-channel strategy. “However, we will substantially simplify the Saks Direct business through streamlining both our infrastructure and business processes,” he said. “Our intent is to leverage the Saks Fifth Avenue brand, existing store-based inventory, and our central organization through the use of direct mail and e-commerce selling. This integration of the Saks Direct business will create a more cohesive, consistent customer experience across all channels, while improving inventory productivity and lowering operating expenses."
Martin noted, "Over the years, the Saks Fifth Avenue Folio operation was developed into a separate business, as opposed to an integrated channel of distribution for the core Saks Fifth Avenue stores. The catalog business was not necessarily reflective of Saks Fifth Avenue`s core merchandising competency of luxury apparel and accessories. An independent organization to merchandise and market the catalog business, and separate systems to support this structure, created too much overhead and complexity in our direct response business. We will thus eliminate Folio as a stand-alone unit, discontinue distribution of the Folio and Bullock & Jones catalogs as of February 2002, and substantially simplify our catalog business."
The company will continue to distributes its catalogs of store merchandise, including to customers who had received the Folio and Bullock and Jones catalogs. The catalogs now, however, will carry the URL and 800-number prominently on each page and will include a mail-order form.
The company says this strategy will permit it to improve financial returns by reducing the operating expenses and investment associated with the multi-channel efforts, fully integrate the direct-mail and e-commerce/e-marketing capabilities with the physical businesses, and simplify management focus.
Saks Direct (catalog and saks.com combined) sales totaled $126.7 million in 2000.
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