Thursday, November 06, 2008

Saks will kill Libby Lu

Saks Inc. is going to discontinue its Club Libby Lu operation. Club Libby Lu was a "concept" operation, intended to appeal to girls of about 6-12.

There were 98 units in the group, 78 stand-alone stores and twenty store-within-a-store units operating in department stores (such as Carson Pirie) that used to be part of Saks' department store groups. Saks has sold off the mid-range department stores, reducing the company to its upscale Saks Fifth Avenue core, with which Libby Lu didn't make a good fit..

The Club Libby Lu business generated $60 million in sales last year. Saks will take an after-tax charge of $11 million in the third quarter and after-tax charges of $18 million to $27 million in the fourth quarter for the closing.

Saks has been selling off its non-core holdings. It sold its northern department store group, including Carson’s, to Bon-Ton Stores for $1.2 billion in March 2006, and sold its Proffitt’s/McRae’s business to Belk for $622 million in May 2005.

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