Here's how Saks revamped its business during the downturn and positioned itself for greater success in future:
- Build up online sales. The company saw Saks Direct sales rocket up more than 20 percent in the past year, capturing customers who were staying away from stores.
- Don't erode margins with discounts. While others slashed prices, Saks stood firm on price straight through the dark days of 2009, preserving its branding as a luxury store. Others may have kept volume up in the recession with price cuts, but discounters now face the problem of trying to get customers back up to their old prices.
- Hire more marketers. Saks invested in its marketing team, hiring 35 new local marketing managers to target specific groups of customers. They also created individual marketing plans for each Saks store.
- Change the mix. Saks went farther in the direction of exclusive product to build its reputation as a destination store.
- Cut costs. Saks CEO Steve Sadove told TheStreet.com the company cut its costs by about 13 percent, removing more than $150 million in variable costs.
- Slash inventory. Excess inventory is the bane of apparel chains, leading to sales or having to remainder goods to discounters. Saks cut inventories by 20 percent and more.
Photo via Flickr user bfishadow