Saks Secedes from Saks Inc. Union

Validation comes for those who claimed the mixed marriage was doomed from the start. Saks Inc. (Birmingham, Ala.) is setting Saks Fifth Avenue (New York) free, two years after purchasing the luxury retailer.

The Saks Inc. board approved the divorce to light a fire under its drooping stock price. The measure will form two public companies — the spin-off to be named Saks Fifth Avenue Enterprises Inc.

Critics questioned the logic of combining mid-market department stores with a top-of-the-food-chain retailer. Saks Inc. — called Proffitt's Inc. prior to the acquisition — also owns Parisian, McRae's, Carson Pirie Scott and Younkers. Reportedly, high-end brand designers worried that Saks stores would be operated under the same principals of store design, visual merchandising and fixturing as the rest of the mid-level retail in the Saks Inc. stable.

Comparing the two new companies, analysts predict Saks Fifth Avenue Enterprises (which will encompass the high-end stores, catalog, Internet and Off Fifth outlet businesses) is in stronger shape due to a currently thriving luxury market within a booming economy.

Saks Inc. will eventually be renamed.