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Saks Inc (SKS)’s New Initiatives Driving Sales

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Saks Inc (NYSE:SKS) stock recently made a five year high because of the Saks-Neiman Marcus merger related news floating in the media. The stock has corrected since then and I believe this correction gives a good buying opportunity in this stock.

The company has taken initiatives to develop itself into a much focused organization with its loyal customer base. It has taken initiatives to improve its omni-channel network under Project Evolution with investment in information technology. Its Saks Inc (NYSE:SKS) First loyalty program and discounts offered through promotional events are expected to drive traffic. Its merchandising assortment of the “9 Box Grid” system at Saks Fifth Avenue stores and store expansion of OFF 5th stores will attract targeted customers.

Saks Inc (NYSE:SKS)

Saks has been able to maintain its strong brand image in high-end department stores with its initiatives. Now, let’s discuss these initiatives in detail.

Saks-Neiman Marcus merger deal created a hike, but things are coming back on track

The Saks Inc (NYSE:SKS)-Neiman Marcus Merger deal made buzz in the market when news of a Goldman Sachs appointment came in the media. Its stock jumped 17.63% in pre-market trading on May 21. Neiman Marcus rejected the deal, and since then the stock has come back down, dropping around 9% in the last month. It is expected to drop further, but will pick up in the long term.

Project Evolution with omni-channel approach will drive sales

Project Evolution is a multi-year transformational program under which the company invested in information technology and offers its products to the customers through its omni-channel network. Saks has taken initiatives to integrate its sales channels to make transactions smooth for customers. It has introduced iPad stores, “Buy online, ship from store” and extended “select store only” inventories to offer at

The company is promoting its store customers to use the omni-channel network, because multichannel customers spend 3-4 times more annually than the single channel users. Its initiatives to improve the customer experience with Project Evolution will drive sales growth.

SaksFirst Loyalty program and promotional events will increase loyalty

Saks Inc (NYSE:SKS) has relaunched its SaksFirst loyalty program this year and eliminated the minimum threshold limit to participate in it. The program will use enhanced information technology and consumer analytics to personalize the company’s marketing initiatives.

Saks has also launched the triple-point electronic gift card event, and increased discounts to 25% from 20% for its Friends & Family event. These initiatives provide incentives to its loyal customers to purchase now rather than later.

Store expansion and merchandising initiative will pull traffic to stores

Saks Inc (NYSE:SKS) has developed 66 OFF 5th stores and 43 Saks Fifth Avenue stores by the end of the first quarter. In Saks Fifth Avenue stores, it has improved merchandising assortment with categorization of its “9 Box Grid.” In this assortment, products are divided in Good, Better and Best categories of Classic, Modern and Contemporary life styles. It will rationalize its stores by closure of the underperforming ones and giving more focus to its best performing stores. It has plans to open 7 new OFF 5th stores and the renovation of four stores during this fiscal year. It has also accelerated its efforts on its planned launch of the website for OFF 5th stores.

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