Saks Fifth Avenue
SAKS FIFTH AVENUE
American retail store
Opened: in 1924 as a joint venture between Horace Saks of Saks & Co. and Bernard Gimbel of Gimbel Bros. Company History: Targeting upscale customers, it was the first specialty store to expand across the nation; financial stresses precipitated the sale of Saks Fifth Avenue to the U.S. subsidiary of British American Tobacco in 1973; company changed hands again in 1990; was acquired by Alabama-based Proffitt's, 1998. Awards: Fifth Avenue store earned a Gold Medal award from the Fifth Avenue Association and remains a New York landmark. Company Address: 12 East 49th Street, New York, NY 10017, USA. Company Website: www.saksfifthavenue.com.
On SAKS FIFTH AVENUE:
Marcus, Stanley, Quest for the Best, New York, 1979.
Leach, William, Land of Desire, New York, 1993.
Benbow-Pfalzgraf, Taryn, "Saks Fifth Avenue," in the International Directory of Company Histories, Detroit, MI, 1999.
"Saks Inc. in Store Deals," in WWD, 7 November 2001.***
Saks Fifth Avenue evokes images of style and elegance. One of the most famous luxury retailers in the world, Saks Fifth Avenue has long been the destination for fashion-conscious men and women. The flagship store at 611 Fifth Avenue at 50th Street opened in 1924 and has served the stylish for over three-quarters of a century.
Andrew Saks was born in Baltimore, Maryland, and moved to Washington, D.C., to make his fortune. He established a clothing business there in 1867 that grew to include stores in other cities. He moved to New York and opened Saks & Company in 1902 at Sixth Avenue and 34th Street with the help of his brother Isadore and his sons Horace and William. When Andrew died in 1912, he was succeeded by the Princeton-educated Horace.
Saks & Company joined with Gimbel Bros. in 1922. Bernard Gimbel gained ownership of the store two years later, although it continued to operate under the Saks name until 1965. Looking for a higher class of clientéle, Horace pushed his new associate to open an upscale store on Fifth Avenue. Gimbel and Saks opened Saks Fifth Avenue in 1924. The beautiful building was awarded a Gold Medal from the Fifth Avenue Association and is now on the designation list of the New York Landmarks Preservation Commission.
Horace Saks died suddenly of septic poisoning in 1926. Bernard Gimbel's cousin Adam had been Horace's assistant and was named president of Saks Fifth Avenue. Handsome, charming, and gregarious, Adam created small specialty shops within the store, which he had redecorated in the dramatic Art Moderne style. He filled Saks Fifth Avenue with exclusive merchandise from Europe and the U.S. and established small boutiques that made custom men's shirts and ladies' made-to-order dresses. He built the dominant fine shoe business and believed in a large stock, even in difficult economic times, so customers could have a large range of choices. He opened the company's first Resort store in Palm Beach, Florida, becoming the first specialty store to expand nationally. Both chains prospered, with Gimbel's and Saks & Company supplying all income levels, while Saks Fifth Avenue appealed to the well-heeled. By 1969, the year Adam retired, there were 28 Saks Fifth Avenue stores in 16 states. In addition to the geographic expansion, Saks Fifth Avenue branched into direct mail sales by introducing Folio in 1970.
In 1973 the U.S. subsidiary of British American Tobacco (B.A.T.) offered to purchase Gimbel Bros. As the company was experiencing financial woes, it was a welcome bid. They renovated the Fifth Avenue store in 1978, closed the Gimbel chain in 1986, and planned a $300 million expansion the following year. Rather than face an unwelcome takeover, Saks Fifth Avenue was sold in 1990 for $1.6 billion. Bahrain-based Investcorp was an international investment group that also owned Gucci Group and Tiffany & Co. Phillip B. Miller, formerly of Neiman Marcus (1977-83) was named CEO of Saks Fifth Avenue.
Financial circumstances caused the firm to open Clearinghouse (Off 5th since 1995), an outlet store for Saks Fifth Avenue merchandise in 1992. In an effort to enhance its West Coast presence, the chain acquired four I. Magnin stores in 1994, though the chain was phased out in 1995. Also in 1995, Saks Fifth Avenue opened the largest store in Beverly Hills, Saks West. The following year, 1996, the holding company, Saks Holdings, went public and Main Street, more compact stores, opened to address the demand of small but wealthy areas.
Saks Holdings was purchased by Proffitt's, based in Birmingham, Alabama, in 1998 for $2.1 billion. The company, which already owned department store chains Carson, Pirie, Scott and Parisian, changed its name to Saks Incorporated to capitalize on the higher prestige of its new acquisition. Christina Johnson became the company's first female chief executive when she assumed the office of president and CEO of Saks Fifth Avenue in 2000. Phillip Miller remained chairman.
Saks Holdings plans to spin off Saks Fifth Avenue and Saks Off 5th, while the catalogue and online Saks Direct were abandoned in early 2001 because of poor sales of luxury items. The $6-billion enterprise operated 62 Saks Fifth Avenue, 50 Saks Off 5th, Saks Direct, 40 Parisian, and 203 stores under the names of Proffitt's, McRaes, Younkers, Herbergers, Carson, Pirie, Scott, Bergner's and Boston Store.