Saks Fifth Avenue 2009 Annual Report Download - page 4

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Table of Contents
PART I
Item 1. Business.
General
The operations of Saks Incorporated, a Tennessee corporation first incorporated in 1919, and its subsidiaries (together the “Company”) consist of Saks
Fifth Avenue (“SFA”), Saks Fifth Avenue OFF 5TH (“OFF 5TH”), and SFA’s e-commerce operations.
The Company is primarily a fashion retail organization offering a wide assortment of distinctive luxury fashion apparel, shoes, accessories, jewelry,
cosmetics, and gifts. SFA stores are principally free-standing stores in exclusive shopping destinations or anchor stores in upscale regional malls. Customers may
also purchase SFA products online at www.saks.com or by catalog. OFF 5TH is intended to be the premier luxury off-price retailer in the United States. OFF
5TH stores are primarily located in upscale mixed-use and off-price centers and offer luxury apparel, shoes, and accessories, targeting the value-conscious
customer. As of January 30, 2010, the Company operated 53 SFA stores with a total of approximately 5.9 million square feet and 55 OFF 5TH stores with a total
of approximately 1.6 million square feet.
Merchandising, sales promotion, and store operating support functions reside in New York, New York. The back office sales support functions for the
Company, such as accounting, credit card administration, store planning, and information technology, are located principally in the Company’s operations center
in Jackson, Mississippi or in the SFA corporate offices in New York City.
The Company’s fiscal year ends on the Saturday closest to January 31. Fiscal years 2009, 2008, and 2007 each contained 52 weeks and ended on
January 30, 2010, January 31, 2009, and February 2, 2008, respectively.
Merchandising
The Company’s stores and e-commerce operations carry luxury merchandise from both core vendors and new and emerging designers. The Company has
key relationships with the leading American and European fashion houses, including Giorgio Armani, Chanel, Gucci, Prada, Louis Vuitton, St. John, Zegna,
Theory, Cartier, David Yurman, Hugo Boss, Elie Tahari, Tory Burch, Ralph Lauren, Akris and Burberry, among many others.
The Company has developed a knowledge of each of its trade areas and customer bases for its operations. This knowledge is gained through use of on-line
merchandise information, store visits by senior management and merchandising personnel, and frequent communication between merchandising staff and store
management. The Company strives to tailor each store’s merchandise assortment to the characteristics of its trade areas and customer bases and to the lifestyle
needs of its local customers.
Certain departments in the Company’s SFA stores are leased to independent companies in order to provide high quality service and merchandise where
specialization and expertise are critical. The leased departments are designed to complement the Company’s owned merchandising departments. The principal
leased departments in the SFA stores are furs and certain designer handbags. The terms of the lease agreements typically are between one and seven years and
may require the lessee to pay for a portion of the fixtures and provide its own employees. Management regularly evaluates the performance of the leased
departments and requires compliance with established customer service guidelines.
2
Source: SAKS INC, 10-K, March 18, 2010 Powered by Morningstar® Document Research℠