Saks Fifth Avenue - History

History

Saks Fifth Avenue is the successor of a business founded by Andrew Saks in 1867 and incorporated in New York in 1902 as Saks & Company. Andrew died in 1912 and in 1923, Saks & Co. merged with Gimbel Brothers, Inc., operating as a separate autonomous subsidiary. On September 15, 1924, Horace Saks and Bernard Gimbel opened Saks Fifth Avenue in New York City.

When Bernard's brother, Adam Gimbel, became President of Saks Fifth Avenue in 1926 after Bernard's sudden passing, the company took on national aspirations, opening its very first branch store that year in the city of Palm Beach, Florida, as a seasonal resort store, followed by a second resort store in Southampton, New York, in 1928. The first full-line year-round Saks store was opened in Chicago, Illinois, in 1929, followed by another resort store in Miami Beach, Florida. In 1938, Saks expanded to the West Coast, opening in Beverly Hills, California. By the end of the 1930s, Saks Fifth Avenue had a total of 10 stores, including resort locations such as Sun Valley, Mount Stowe, and Newport. More full-line stores followed with Detroit, Michigan, in 1940 and Pittsburgh, Pennsylvania, in 1949. In downtown Pittsburgh, the company moved to its own freestanding location approximately one block from its former home on the fourth floor in the downtown Gimbel's flagship. The San Francisco location opened in 1952. More expansion followed from the 1960s through the 1990s including Texas, the Midwest, and the South.

BATUS Inc. acquired Gimbel Bros., Inc. and its Saks Fifth Avenue subsidiary in 1973 as part of its diversification strategy. In 1990, BATUS sold Saks to Investcorp S.A., which after investing in the company and weathering the early 1990s recession took Saks public in 1996 as Saks Holdings, Inc. In 1998, Saks Holdings Inc. was acquired by Proffitt's, Inc., then the parent company of Proffitt's among other department stores. Upon closing of the acquisition, Proffitt's, Inc. changed its name to Saks Incorporated.

In 2005, vendors filed against Saks alleging unlawful chargebacks. The SEC formally investigated the complaint and Saks settled with the SEC in 2007.

In August 2007, the United States Postal Service began an experimental program selling the plus Zip Code extension to businesses. The first company to do this was Saks Fifth Avenue which received the zip code of 10022-SHOE for the eighth floor shoe department in its flagship Fifth Avenue store. Today, the New York flagship store accounts for a significant amount of the entire chain's annual revenue.

Since 2000, Saks has closed a number of locations, including White Plains, Garden City, and Southampton in New York, as well as other suburban, and "downtown" locations around the country. The focus has been to have a smaller number of stores in each key market, and thus make those stores destinations within their respective markets. As an example, the Saks 5th Avenue location at the Shops at Prudential Center in Boston is the only Saks 5th Avenue store in the greater Boston metropolitan area, and the location in Bala Cynwyd is the only location in the greater Philadelphia market. Saks closed its 60 year-old downtown Pittsburgh location on March 17, 2012.