BRIAN KENDRICK, SAKS HOLDINGS INC.
Brian Kendrick, vice chairman and chief operating officer of Saks Holdings Inc., parent of Saks Fifth Avenue, is no stranger to the Tampa Bay area. A decade ago, he was chief financial officer of Maison Blanche Inc., the Baton Rouge, La., department store chain that based its Florida operations in St. Petersburg. Maison Blanche grew from two to 24 stores before crumbling under a heavy debt load. The pieces were sold to Gayfer's and Dillard Department Stores Inc. Staff writer Mark Albright chatted with Kendrick in Tampa recently when Saks announced it would open its first Tampa Bay store at West Shore Plaza in November 1998.
Q. How do you see the upcoming Christmas season shaping up for retailers?
A. All the economic fundamentals _ barring something macro happening in the stock market _ look real good. Consumer confidence is high. The economy is going well. Frankly, the signs are so good that even the broad-lines retailers that have not fared too well at Christmas for the past several years should do well. If they don't this year, will they ever? In our business, which is the highly affluent customer, we think we're in for a good Christmas, too, something in the range of a 4 to 6 percent sales gain.
Q. Saks has been spurned in making several offers to buy Barneys of New York out of its ongoing Chapter 11 bankruptcy proceeding. Have you given up trying?
A. We've taken a back seat. Subsequently, they've had to close several stores. Right now, someone else has a bid on the table they have to decide on, but, no, I don't think it's over yet.
Q. With Barneys you could have added substantially to your hold on the Manhattan market. Just your one store there by Rockefeller Center does $450-million in sales a year. That's about one quarter of Saks' entire $1.9-billion in sales at one location. Any thoughts of adding another store in Manhattan?
A. No. But we are moving just about every backstage support function left at the main store out so we can get more selling space there. We've identified about 30,000 square feet (the size of three Eckerd Drug stores) that we can convert to selling space.
Q. Following the success of Nordstrom, most fashion department stores are going heavier and heavier into private label apparel. Some get up to 25 percent of their total annual sales on their own store labels, almost twice as much as a decade ago. And a few have set a goal of getting as high as 40 percent. Saks is a strong brand name. Where does private label fit in your plans?
A. We're at about 7 to 8 percent and trying to get to about 12 to 14 percent. We've found that the newly affluent customer across all age groups is absolutely drawn to the prestige products. They want the top quality and status the designer brand represents. They will buy it even if means buying two outfits for the price they once paid for four.
Q. Saks last year began experimenting with its so-called Main Street stores, chopped-down 40,000-square-foot stores designed to fit in small, downtown locations in very high-income suburbs such as Greenwich, Conn. Now you're putting them in some other locations. What's their future?
A. Right now it appears they are going to be in the most affluent suburbs of the major, major metro areas to augment bigger stores we already have there. We're putting two in the San Francisco bay area in 1998. We're opening a 55,000-square-foot one in Austin, Texas, this fall that will test how they do as the only store in a good-sized market.
Q. How about Saks Off Fifth, your 33-store venture into outlet malls?
A. They can be a very strong performer if they're sized at 30,000 to 35,000 square feet. We've closed three or four smaller ones and probably will close three or four more for the same reason. The outlets account for 13 to 14 percent of our sales, and I don't see that percentage changing.
Q. Saks will offer an array of private shopper services at its new Tampa store. Any services that might be unusual for a Tampa store?
A. We're thinking of putting in a full-service spa with massage and facials.