Saks Off 5th will be closing 10 stores scattered across the United States as its parent, luxury retail giant Saks Global, looks to streamline its brick-and-mortar property.
The off-price chain with 79 locations now has slated nine stores for closing starting early next year, New York-based Saks Global confirmed in an email to CoStar News. A 10th location, at 125 E. 57th St. in Manhattan, will go dark on Dec. 31 as the building that houses it is converted from commercial to residential use. That prompted Saks Off 5th's decision to exit that retail site.
Almost a year ago, Hudson's Bay Co., owner of Saks Fifth Avenue and Saks Off 5th, closed on its $2.7 billion acquisition of competitor Neiman Marcus Group, owner of its namesake chain and Bergdorf Goodman. Since then, the combined company Saks Global has been refining its portfolio, shedding some properties, closing some stores and looking to sell a stake in Bergdorf. This has all come as Saks Global struggles financially under a heavy debt load.
Off-price retailers have fared well as strained budget-conscious shoppers hunt for deals. The off-price winners in this economy include TJX Cos.' T.J. Maxx and HomeGoods, Burlington Stores and Nordstrom's participant in this arena, Nordstrom Rack. The number of Nordstrom Rack stores has soared to 300.
Off-price chains offer brand-name and designer clothes and other goods at a lower price than traditional stores. They sell off-season stock, irregular clothes, merchandise from canceled orders, surplus and returned goods, unused inventory, and factory seconds from their suppliers.
The looming Saks Off 5th closings, earlier reported by WWD, are part of the chain's efforts to focus on its high-potential stores, according to a Saks Global spokeswoman.
The stores slated to close next year are in: Austin, Texas; East Hanover, New Jersey; State Street in Chicago; Philadelphia Mills, Pittsburgh North and Plymouth Meeting, all in Pennsylvania; Niagara Falls, New York; Washington, D.C.; and West Hartford, Connecticut.
New initiatives planned
“We have identified opportunities to optimize our Saks Off 5th store presence, through both initiatives to drive performance and elevate the customer experience, enabling us to place greater attention to our high-performing and high-potential store locations, and refinements across our store footprint," she said.
The goal is to strengthen those stores "by investing in key areas that will improve the shopping experience and enable us to deliver an incredible assortment to our customers," according to the Saks Global spokeswoman.
"In certain store locations in top markets, we have been piloting new initiatives intended to drive performance, including initiating capital enhancements, elevating our selling model, introducing development opportunities for colleagues and partnering closely with our merchandising team to enhance our in-store assortment,” the Saks Global spokeswoman said.
The 2026 closings are part of an "ongoing and comprehensive strategy" that entailed taking "a critical eye to our store footprint," she said.
"We are confident this will better position the Saks Off 5th business for long-term success and look forward to continuing to deliver for our customers,” she said.
Under new ownership, the building that houses Saks Off 5th's 57th Street store is in the process of being reclassified from a commercial to a residential property. As part of that reclassification and the ensuing construction over a two-year period, the chain has opted to leave that location at the end of the year.
Impact on the competition
The Saks Off 5th closings will give the chain's competitors an opening, according to Rudy Milian, president and CEO of retail consultant Woodcliff Realty Advisors.
"Instead of closing Saks Off 5th stores, Saks Global should be looking to further refine the concept to make them more profitable as luxury at a discount continues to be a very hot retail concept," he said in an email to CoStar News. "These closings might just give TJX and Nordstrom Rack a chance to take over some of these locations for their well-run treasure hunt stores."
Nancy Mair, president of NCM Consulting and a veteran of Saks Off 5th rival Nordstrom Rack, was critical of the Saks Global chain in a post on LinkedIn on Thursday.
"In my experience at Nordstrom Rack, in order for an off-price retailer to grow as a nested part of a bigger company, there needs to be direct laser focus on product strategy," Mair wrote. "Saks Off 5th has steadily been getting worse, with a poor assortment of product, meaningless brands, and high prices."
By contrast, "Nordstrom Rack is rocking and rolling and doubling down on store openings with data-driven decision making," according to Mair.
"Nordstrom Rack is the most important vehicle for customer acquisition for Nordstrom and their extremely premium off-price assortment rivals all other off-pricers. They are the leader in better off- price and have the strategy, focus and data to continue to grow," Mair said.
Saks Global declined to comment on Milian and Mair's remarks.