NEW YORK--(BUSINESS WIRE)--Sept. 18, 2006--Retailer Saks Incorporated (NYSE: SKS) (the "Company") today announced its plans to further expand its international presence by opening its first Saks Fifth Avenue store in Mexico.
The Company has entered into a license agreement with Operadora de Tiendas Internacionales S.A. de C.V., a wholly owned affiliate of Grupo Sanborns S.A. de C.V. ("Grupo Sanborns") to locate and develop appropriate sites for potential Saks Fifth Avenue stores in Mexico. Grupo Sanborns will own and operate the stores under the license agreement with Saks Fifth Avenue.
The first Saks Fifth Avenue store is expected to open in September 2007 in the Santa Fe Shopping Center, an upscale development in Mexico City. The tri-level, 150,000-square-foot store will be congruent with the Saks Fifth Avenue stores in the United States in both product and service, while being sensitive to local preferences. The Mexico City location will include distinctive offerings from established and emerging American and international designers and will present a sought-after collection of fine designer apparel for the entire family as well as shoes, jewelry, accessories, handbags, fragrances and cosmetics, intimate apparel, bridal, and select gift items. Saks Fifth Avenue will deliver an exceptional program of personalized customer service and expects to offer numerous in-store amenities such as luxury fitting rooms, a spa, and its signature Fifth Avenue Club. The unique store will also offer an abundant ongoing calendar of special events such as fashion shows and personal appearances by designers.
Stephen I. Sadove, Chief Executive Officer of Saks Incorporated, commented, "Saks Fifth Avenue is one of the most recognized luxury retail brands in the world. We currently operate successful licensed stores in Riyadh, Saudi Arabia and Dubai, U.A.E., and we have announced plans to open our first store in Shanghai, China.
"Mexico City is a great tourist and shopping hub and is the logical location for our third international licensed Saks Fifth Avenue store. We look forward to working with Grupo Sanborns to bring a unique, world-class selection of luxury brands and experiences to Mexico City and to meeting the fashion lifestyle needs of this growing and important marketplace. Based on the success of the Saks Fifth Avenue store in Mexico City, we will consider future expansion into other cities in Mexico. Grupo Sanborns is the premier retail enterprise in Mexico, and we could not ask for a more highly-regarded or better business partner to assure our future success in this region."
Sadove continued, "While our principal focus remains on improving the operations of our domestic stores, the opening of select international licensed locations can broaden the reach of our brand and produce a supplemental income stream for the Company."
Arq. Eduardo Peralta, Vice President of Grupo Sanborns, commented, "It is an honor for Grupo Sanborns to be chosen as licensee for one of the most recognized retail stores around the world. This new project will bring a new face for fashion in Mexico and will increase our opportunity to give better services for all our customers.
"In the Mexico City Saks Fifth Avenue store, fashion, service and luxury will be our goal, and we assume that the customers will respond to what Saks expects from our marketplace.
"This will be a great opportunity to consolidate Grupo Sanborns' image and its presence all around the country with this kind of luxury store."
About the Companies
Saks Incorporated currently operates Saks Fifth Avenue Enterprises (SFAE), which consists of 54 Saks Fifth Avenue stores, 50 Saks Off 5th stores, and saks.com. The Company also operates 38 Parisian stores and 62 Club Libby Lu specialty stores. On August 2, 2006, the Company announced it had agreed to sell Parisian to Belk, Inc. for $285 million in a transaction expected to close on October 2, 2006.
Founded in 1924 with the opening of its Fifth Avenue, New York flagship store - which continues today to be the Company's landmark store - Saks Fifth Avenue has grown to 54 stores throughout the United States, complemented by two licensed stores in the Middle East. Saks Fifth Avenue is one of the most recognized luxury retail brands in the world and has key relationships with the leading fashion houses including Giorgio Armani, Chanel, Dolce and Gabbana, Salvatore Ferragamo, Gucci, Donna Karan, John Varvatos, Calvin Klein, Ralph Lauren, Judith Leiber, Prada, Escada, Carolina Herrera, Oscar de la Renta, St. John, Yves St. Laurent, TOD'S, Ermenegildo Zegna, and Max Mara.
Mexico-based Grupo Sanborns is a subsidiary of Grupo Carso S.A. de C.V. ("Grupo Carso"), which controls and operates a diversified group of companies related to the retail, industrial, and consumer business. Through Grupo Sanborns, Grupo Carso operates several retail formats such as Sanborns, Sanborns Cafe, Mixup music stores, and Sears and Dorians department stores as well as several specialized stores including Oakley, Mask, Pier 1, Sasch, and Von Dutch among others, and owns and operates some of the most important shopping centers in Mexico City.
Forward-looking Information
The information contained in this press release that addresses future results or expectations is considered "forward-looking" information within the definition of the Federal securities laws. Forward-looking information in this document can be identified through the use of words such as "may," "will," "intend," "plan," "project," "expect," "anticipate," "should," "would," "believe," "estimate," "contemplate," "possible," and "point." The forward-looking information is premised on many factors, some of which are outlined below. Actual consolidated results might differ materially from projected forward-looking information if there are any material changes in management's assumptions.
The forward-looking information and statements are or may be based on a series of projections and estimates and involve risks and uncertainties. These risks and uncertainties include such factors as: the level of consumer spending for apparel and other merchandise carried by the Company and its ability to respond quickly to consumer trends; adequate and stable sources of merchandise; the competitive pricing environment within the retail sector; the effectiveness of planned advertising, marketing, and promotional campaigns; favorable customer response to relationship marketing efforts of proprietary credit card loyalty programs; appropriate inventory management; effective expense control; successful operation of the Company's proprietary credit card strategic alliance with HSBC Bank Nevada, N.A.; geo-political risks; changes in interest rates; the outcome of the formal investigation by the Securities and Exchange Commission and the inquiry the Company understands has been commenced by the Office of the United States Attorney for the Southern District of New York into the matters that were the subject of the investigations conducted during 2004 and 2005 by the Audit Committee of the Company's Board of Directors and any related matters that may be under investigation or the subject of inquiry; the ultimate amount of reimbursement to vendors of improperly collected markdown allowances; the ultimate impact of improper timing of recording of inventory markdowns; the ultimate impact of incorrect timing of recording of vendor markdown allowances; the outcome of the shareholder litigation that has been filed relating to the matters that were the subject of the Audit Committee's initial investigation; and the successful consummation of the Parisian transaction. For additional information regarding these and other risk factors, please refer to Exhibit 99.1 to the Company's Form 10-K for the fiscal year ended January 28, 2006 filed with the SEC, which may be accessed via EDGAR through the Internet at www.sec.gov.
Management undertakes no obligation to correct or update any forward-looking statements, whether as a result of new information, future events, or otherwise. Persons are advised, however, to consult any further disclosures management makes on related subjects in its reports filed with the SEC and in its press releases.
CONTACT: Saks Incorporated Julia Bentley, 865-981-6243 or David Pilnick, 212-940-5080 http://www.saksincorporated.com
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