(Crystal Proenza is associate editor of Real EstateFlorida.)
FORT LAUDERDALE, FL-Saks Inc. has announced that it will close its Saks Fifth Avenue store at the Galleria Mall at 2414 East Sunrise Blvd. The 73,000-sf leased space is expected to close July 20. The company reported that 60 associates will be effected by the closing, all of which will receive severance packages or transfer opportunities.
"The store did not meet the company's profitability standards," Julia Bentley, a Saks Inc. spokesperson, tells GlobeSt.com about the closing. "We believe we can serve our customers with the existing stores in South Florida," she says, which include locations in Boca Raton, Miami, Bal Harbour, Palm Beach and Palm Beach Gardens. The company operates 54 Saks Fifth Avenue stores and 48 Saks Off 5th outlets.
The news comes one week after Thomas Financial News reported that many department stores suffered a slump in sales, and therefore stock values, but singled out Saks as doing better than Wall Street expectations. The company posted a 24% increase in sales at stores open at least one year in April. Overall, Saks' first-quarter revenue rose 8.6% over the year, from $785.6 million in 2007 to $853.4 million this year.
So why did this particular store close? Marc Strauss, senior director of the national retail group for Marcus & Millichap based in Fort Lauderdale, tells GlobeSt.com that it could be a combination of local and national issues.
"Galleria Mall is a tired property that really needs a lot of reworking to increase its traffic," Strauss says. He also points out that Saks waited until the end of the winter visitor season to close the store, a possible indication that it can no longer count on the support of year-round residents.
From a national perspective, Strauss says the slumping economy is driving many shoppers away from high-end stores and sending them to value-oriented merchants instead. This is forcing several well-known chains to file for Chapter 11 bankruptcy or shut down altogether, he says.
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