Retailers, consumers and prices
With newly frugal shoppers sticking to newly shrunk budgets, Saks posted a quarterly loss that was much steeper than Wall Street expected, and said same-store sales in its fourth quarter fell 15.3 percent.
“During the quarter, the company experienced continued weakness across all geographies, merchandise categories, and channels of distribution,” said Chairman Stephen Sadove.
Saks grabbed headlines this holiday for slashing prices on designer merchandise after it realized its stores were stocked with too much inventory. The aggressive price cutting may have long-term consequences if shoppers, accustomed to discounts, balk at paying full price once again.
Saks said it expects the environment will be “extremely challenging” throughout 2009 so it is cutting its capital spending plans and said it is targeting a 20 percent decrease in inventory receipts for the year.