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Saks Shutting Down Club Libby Lu Chain

Closure of 78 Stand-Alone Stores to Result in Approximately 86,000 Sq. Ft. of Vacant Mall Space
By Sasha M Pardy
November 7, 2008 | 6:35 P.M.

Luxury department store retailer, Saks Incorporated (NYSE: SKS), is discontinuing its Club Libby Lu division, a 78-store experiential retail chain catering to "tweens" (girls age four to twelve). Saks expects the store closing process to be complete by May 2, 2009. As part of this discontinuation 1,700 Club Libby Lu employees will be displaced. Saks acquired Club Libby Lu in 2003 for $12 million as an 11-store chain. At the time, Saks said the "fresh, distinctive concept" was consistent with Saks' strategic direction and the company saw "great potential both as a mall-based specialty store and as a destination shop" within some Saks department stores. Club Libby Lu generated $60 million in revenues during Saks last fiscal year. In addition to the 78 stand-alone, there are currently 20 Club Libby Lu stores located within Saks locations. Saks leases all stand-alone Club Libby Lu locations; substantially all of the stores are located within regional malls and average store size is 1,100 square feet. Saks estimates $15 million to $24 million of costs associated with inventory liquidation, store closure, and lease termination costs.

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