Saks’ Mixed Bag

Saks Inc. (Birmingham, Ala.) reported a second-quarter loss of $28.9 million despite sales rising 9.2 percent.

The department store retailer said its latest quarter was hurt by a charge while the same period a year ago had benefited from a one-time gain.

Last year, the quarterly loss was $25.8 million.

Saks said its New York-based SFAE unit, made up of Saks Fifth Avenue and Saks Off 5th outlet stores, posted “solid” quarterly results. The unit’s operating loss narrowed to $12.4 million from $22.1 million.

However, results at SDSG, the company’s department store operation, worsened, with operating income plunging 57 percent. The unit, which includes the Parisian, Proffitt’s, McRae’s, Younkers, Herberger’s, Carson Pirie Scott, Bergner’s and Boston Store department store chains as well as the Club Libby Lu specialty stores, suffered from below-plan sales and gross margin performance and a decline in expense leverage. Based on this, Saks now anticipates same-store sales to increase in the low single-digit percentages at SDSG in the second half of the year.

For the first six months of the year, Saks’ loss fell to $6.9 million. First-half sales increased 10 percent.

Saks has plans for six new or replacement stores in 2004, in Iowa, Alabama, North Carolina, Texas and Florida. The company this year has closed three stores totaling about 400,000 square feet and expects net square footage growth for the year to be about 220,000 square feet.