Saks Posts Steep Net Loss in Q4

New York City Saks reported Wednesday that it blames consumer cutbacks and the recent discontinuation of its Libby Liu operations for a net loss of $98.8 million for the fiscal fourth quarter, ended Jan. 31. This is compared to a net profit of $39.5 million for the same quarter in 2008.

Despite aggressive promotions, the economy took its toll on same-store sales, which declined 15.3% for the quarter. The retailer experienced a 9.0% same-store sales gain for the same period last year.

“During the quarter, Saks experienced continued weakness across all geographies, merchandise categories, and channels of distribution,” said Stephen Sadove, chairman and CEO. “Women’s apparel continued to be the most challenging merchandise category.”

Similarly, Saks Direct same-store sales dipped 1.3%, compared to an increase of over 40% in last year’s fourth quarter.

For the fiscal year, Saks reported a net loss of $154.9 million, and same-store sales declined by 6.1%. Overall, the retailer posted an operating loss of $113.8 million. This is compared to operating income of $143.5 million in the prior year.

On a positive note, Saks Direct’s same-store sales increased approximately 16% for the current fiscal year.

Saks plans to offset these declines in fiscal 2009 with cost reductions that will be the result of staff reductions, and revisions to compensation and employee benefit plans, according to a company statement.

Based on these, and additional cost-saving steps across procurement, information technology, distribution and logistics, travel and marketing, Saks expects to save between $50 million and $60 million in fiscal 2009.