*Saks Opens Online Doors

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Upscale fashion retailer Saks Inc. finally went e-commerce last week with its flagship Saks Fifth Avenue brand, though the soft launch was muted and company executives were unavailable for comment.


The e-commerce site at www.saksfifthavenue.com comes only a month after Saks Inc. announced it would spin off Saks Fifth Avenue and its allied businesses by November. Though a drop in the bucket for the multi-billion-dollar Saks, the online operation through year-end should generate sales of $15 million to $20 million, a company statement said.


"Through this initiative, we expect to capture a meaningful share of the growing online luxury market," said R. Brad Martin, chairman/CEO of Saks Inc., Birmingham, AL, in the statement. "[But] we will continue to incur start-up expenses in this business and post losses, estimated at 5 cents per share in the second half of the year.


"This investment is appropriate in light of the high average transactions and high gross margins that will be generated, combined with our ability to leverage existing fulfillment capabilities."


The site will rely not only on its bricks-and-mortar parent for fulfillment, but for brand, customer and vendor ties and, more importantly, marketing.


The retailer this month debuted a colorful lifestyle campaign targeted at customers and new, younger prospects. Executed in-house by Saks Fifth Avenue's New York office, the "Live a Little" campaign runs on radio in major metros and in national newspapers and magazines such as Vanity Fair, Fortune and Vogue.


Besides pushing the stores, the effort boldly mentions the saksfifthavenue.com Web address, a departure from previous advertising.


Jennifer Mann, spokeswoman at Saks, New York, said in-store efforts include the Saks Web address on shopping bags and window displays. There are 61 Saks Fifth Avenue stores in 23 states nationwide, including the 76-year-old flagship on New York's Fifth Avenue.


The Web site, a medley of frames showcasing models in various poses and products, allows consumers to shop by designer brand, individual item, or by distinct look. Viewers can zoom up close and see items from various angles in departments for men, women, children and gifts.


Although the variety has yet to match Saks Fifth Avenue stores, the site offers brands such as Anne Klein, Bulgari, Moschino Cheap & Chic, Dolce & Gabbana, Salvatore Ferragamo, Hugo Boss, Centrum Co., and Rochard.


Saks' Mann said the site is currently being tested for a formal launch on September 1.


The site is designed as much with art in mind as commerce -- a concept anathema to Lisa Allen, senior analyst at Forrester Research, Cambridge, MA, who covers upscale online retailers.


"Their home page is an absolute waste," Allen said. "[Online] retailers say that they sell more items from their home page than from other pages on their site, and all this white space is a missed opportunity. They should get rid of this white screen."


Allen also found the many layers in the site an unnecessary delay in getting the shopper from browsing to transacting. Also, the sales pitch and its context with product display should be more overt, she pointed out.


Though the site offers a slew of features common to many online retailers, its use of younger models and unconventional poses and product arrangement arguably is to attract a younger consumer base.


Saks Chairman/CEO Martin acknowledged this effort to attract younger shoppers in a second-quarter earnings telephone call last week.


Saks Fifth Avenue "can be perceived to be a store that's a little off-putting, a little stuffy," Martin admitted in the call.


Online, it seems Saks Fifth Avenue is trying to be just opposite of that. Too much creativity with distracting design may not sit well with consumers either.


"They need to get over the fact that they're not creating a print catalog that's going to sit on a coffee table," Forrester's Allen said. "They have to have a Web site that's user-friendly, easy to navigate and merchandised for online, not print."
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