Luxury retail giant Saks Global is optimizing its brick-and-mortar footprint, planning to close a fulfillment center in Tennessee and shutting a Saks Fifth Avenue store in Palm Beach, Florida, over the weekend.
Saks Global told Tennessee state labor officials that it is closing its industrial facility at 1 Walden Books Drive in La Vergne, near Nashville, and will be laying off 446 workers. That "permanent closing" will start June 4, with all job cuts completed Nov. 30. Saks Fifth Avenue leases nearly all of that 564,300-square-foot property, which is owned by Prologis, according to CoStar data.
And this past Saturday, Saks Global closed its Saks store on tony Worth Avenue in Palm Beach, a street where it has had a presence for almost a century. Saks Global announced in February it was vacating that space at the Esplanade high-end shopping complex where its lease is expiring.
Saks Global — formed when Hudson's Bay Co., Saks Fifth Avenue' then parent, acquired Neiman Marcus Group for $2.7 billion the end of last year — is in the midst of adjusting and downsizing its physical presence in the wake of the merger. In February, Neiman Marcus sent its headquarters landlord a notice that it wanted to terminate its office lease at Cityplace Tower.
The company also in February announced it was closing its landmark Neiman Marcus flagship in downtown Dallas, saying its shoppers could be served by the chain's suburban mall stores. But following impassioned pleas and negotiations with local city and business officials, in late March Saks Global reached a deal to keep the store open until at least through the holiday season. The parties plan to reimagine the historic nine-story building at 1618 Main St.
Saks Global said it will be shifting operations now located in La Vergne to a facility it has at 25 Keystone Blvd. in Pottsville, Pennsylvania. Saks leases 910,500 square feet at that location, according to CoStar data
“As we come together as Saks Global, we are continuing to take steps to optimize our fulfillment network to ensure we are best positioned to serve our customers," a company spokesperson said in an email to CoStar News on Monday. "With this, we will be shifting inventory volume to Saks Global’s Pottsville, Pennsylvania, distribution center, which is well-equipped to scale to handle the additional volume.”
As for the now-closed Palm Beach Saks store, the retailer said it is "evolving" its offerings in Palm Beach and serving those customers in different ways.
“We are excited to team up with the White Elephant hotel to open The Fifth Avenue Club, our personal shopping and styling service, in Palm Beach anticipated this fall," a Saks Fifth Avenue spokesperson said in an email to CoStar News. "In the meantime, we look forward to continuing to serve customers at our stores in Palm Beach Gardens and Boca Raton and on Saks.com.”
Bruce Koniver of Odyssey Retail Advisors is handling re-tenanting the Saks space, as well as other storefronts at Esplanade.
As for the Palm Beach store employees, Saks Fifth Avenue said they will be offered transfer opportunities to nearby Saks locations where available and that eligible employees who qualify will be offered severance packages.
Saks Global CEO Marc Metrick last week told WWD that he's aiming to cut annual costs at the company by roughly $500 million a year over the next few years. He predicted there would be more store closings, but under 10 of them, possibly where Saks and Neiman have locations near each other, according to WWD.
The Saks' flagship last summer adopted "appointment-only" shopping. The retailer has also opened its Fifth Avenue Club, luxury personal shopping and styling services, with the launch of private, standalone suites in hotels and resorts across the nation.
The San Francisco Saks is across from the city's Neiman Marcus. The Sak's lease at 384 Post St. expires in February 2027, according to CoStar data.