During its Q2, which ended July 30, the company's 56-store upscale Saks Fifth Avenue chain lost $42.8 million. Though year-over-year same-store sales rose 4.2%, the units were impacted by a decline in gross margin rate and increased operating expenses. Total sales rose 1.7%, to $590 million.
The chain's New Orleans store is closed indefinitely due to damage from Hurricane Katrina. Among the remodels the company has planned are for units in Atlanta; Boston; Costa Mesa, CA; and San Antonio. The company plans to close units in Fort Worth, TX; Mission Viejo, CA; and Palos Verdes, CA at an undetermined date.
Saks' 183 other department stores, called the Saks Department Store Group, brought in $2.4 million, a $1.4 million decline from last year. Executives attributed the loss the sale of its Southern department store group. Same-store sales rose 0.5%, on a total sales decline of 5.8%, to $723.5 million. The company is trying to sell the stores in this group, including the Boston Store, Bergner's, Carson Pirie Scott, Herberger's, and Younkers chains. The exception is the 41-store specialty Parisian chain in the Southeast and Midwest.
For the second half of the year officials predict a middle single-digit same-store sales jump for its Saks Fifth Avenue and a flat-to-low single-digit increase for its other stores. "Going forward," said Fred Wilson, chairman and CEO of Saks Fifth Avenue. "We can and will do better."
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