Dive Brief:
- Saks Global is shutting down a fulfillment center in Tennessee and laying off about 450 employees there, according to a WARN Notice filed with the state’s Department of Labor and Workforce Development last week.
- The department store conglomerate has downsized more than once in the last year or so, before and after parent HBC acquired Neiman Marcus Group in December for $2.7 billion.
- Saks Global didn’t immediately respond to requests for comment on the fulfillment center plans and on reports that more layoffs and store closures are also in the works.
Dive Insight:
Saks Global is having a rough year so far, and tariff policies from the Trump administration aren’t helping.
In addition to a round of layoffs in February, tensions with vendors that came to light around the same time led some analysts to question the company’s financial viability. Suppliers, after complaining of not being paid for months, were dismayed by a memo from Saks Global CEO Marc Metrick that outlined drawn-out payment terms for past-due invoices and left them little choice but to accept or potentially be dropped.
Some analysts see its frayed vendor and customer relationships as an opening for Nordstrom, which hired former Neiman Marcus personal stylist Catherine Bloom as its director of luxury styling.
North American department stores, especially Saks and Kohl’s, are vulnerable to the consequences of new U.S. trade policies, according to a research note last week from Moody’s Ratings analysts led by Christina Boni. Moody’s calculates that tariffs will drive a 10% decline in adjusted EBIT for this segment.
“Department stores face operating performance and profitability risks even without the uncertainty of US tariffs, which will aggravate tightening discretionary consumer spending,” Boni said.
Saks Global is working to slash some $500 million in operating costs, via more store closures and layoffs, according to a Women’s Wear Daily interview with Metrick last week. Saks Global no longer employs chief merchants, per that report; the company didn’t immediately respond to sister publication Retail Dive’s questions for clarification. The company shook up its merchandising team in July.
One store that will remain open, at least through the holidays, is the Neiman Marcus location in downtown Dallas. Saks Global had tussled with city leaders for weeks after announcing that a landlord dispute would force the store to close at the end of March, but ultimately delayed those plans.
