While certain department-store chains struggle to find their identities, Saks
The Saks Fifth Avenue name operates in the upscale realm of department-store retailing, along with competitors such as Nordstrom
In 2005, the company decided to begin jettisoning its numerous non-Saks stores, starting with the sale of its Northern department stores to Bon-Ton Stores
The non-core chain sales provided Saks the capital to help out shareholders through the repurchase of shares, the paying down of debt, and payment of a juicy $4 dividend. And while the financials remain messy because of related restructuring and other special charges, same-store sales trends are doing nicely. Along with the full-year earnings announcement today, management stated that full-year comps advanced a nice 4.9% while fourth-quarter and February numbers accelerated ahead by 9.9% and 24.7%, respectively.
Saks still has work to do in earning a track record for consistent, profitable growth now that it's settled on high fashion, but this has proved to be one of the better-performing segments of retailing over the past several years and has attracted private-equity interest, as witnessed by Neiman's shift to privately held status.
Just for comparison's sake, investors can keep tabs on the other concepts by observing what Bon-Ton and Belk are able to do with them. Without a crystal ball, we can't predict the outcome with certainty, but you have to commend Saks for taking decisive action.
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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. The Fool has an ironclad disclosure policy. Feel free to email him with feedback or to discuss any companies mentioned further.