<div id="readability-page-1">Because its existence was fraught from the start, few observers were surprised by Saks Global’s bankruptcy filing early this year. But the near-total abandonment of its Saks Off 5th off-price business seemed less obvious.The company’s online discount business — once designated as a hub for growth — is liquidating entirely. In brick and mortar, just a dozen Saks Off 5th stores will remain open, to offload excess inventory from the full-line stores run by Neiman Marcus, Saks Fifth Avenue and Bergdorf Goodman.The pullback at Saks Off 5th follows a similar move at Neiman Marcus’ Last Call six years ago. Saks Global CEO Geoffroy van Raemdonck, who had the top job at Neiman Marcus Group at the time, gave the same rationale he gave then: that the move allows the company to prioritize luxury.“As we advance on Saks Global’s transformation, we are taking decisive steps to realign our business to better serve our luxury customers and drive full-price selling across our core luxury businesses,” he said in a statement when the off-price plans were announced. “With these actions, we will be well positioned to seize the greatest opportunities for long-term growth and value creation.”The small fleet of off-price stores will be enough for the job of clearing out old inventory, but not to serve as a viable off-price business, according to GlobalData Managing Director Neil Saunders.<div><hr/><div>“Just having last year’s merchandise at 40%, 50% off in an outlet store is not a business plan.&#34;<img src="https://imageproxy.pbkrs.com/https://d12v9rtnomnebu.cloudfront.net/diveimages/corporate_site/teampage/square_profiles/placeholder-200.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="200" height="200" original-src="https://imageproxy.pbkrs.com/https://d12v9rtnomnebu.cloudfront.net/diveimages/corporate_site/teampage/square_profiles/placeholder-200.png"/><div>Glenn McMahonManaging Partner, MAC Advisory and Consulting</div></div><hr/></div>“To be successful, off-price needs to have very skilled buyers who carefully select inventory from many sources and build a range that’s interesting and constantly changing,” he said by email. “It doesn’t sound like that model will be in play at Saks.”Yet off-price retail has been growing as department stores decline, and department stores for the most part have joined in. Retailers like TJX, Ross and Burlington, which have nailed pricing and procurement even in the tariff era, are also expanding rapidly and grabbing market share.Walking away from the off-price customer seems unwise to Glenn McMahon, managing partner at MAC Advisory and Consulting. And the focus on full price may be unrealistic, given the reality that “there always will be markdowns and always be liquidations,” he said by phone.“They think that they're going to replace all that off-price volume with full-price volume, at margin? I don't understand that thinking — it's a completely different customer,” he said. “Just having last year's merchandise at 40%, 50% off in an outlet store is not a business plan. In off-price, that’s a model for failure. Even TJ Maxx has $50 million in private brands they do themselves.”In truth, Saks Off Fifth wasn’t all that successful, according to Saunders, who blamed “poor operational control which resulted in low volumes of inventory and weak assortments.”“This lack of traction makes their decision to scale back logical, but it’s still a lost opportunity,” he said.Saks Global may be walking away from the off-price customer, but the off-price customer keeps moving. Nordstrom and TJX Cos. stand to benefit the most, analysts say.Both are in expansion mode. This month, for example, Nordstrom’s off-price Rack unit announced two more stores in California that will mean more than 70 locations in the state. In all, Nordstrom plans to open 23 stores this year, after opening 22 last year. Indeed the company runs nearly 400 stores, but fewer than 100 full-line stores, and CEO Erik Nordstrom has called Rack“a growth engine for our company” and key to customer retention.Already, Rack stores have taken share from nearby Saks Off 5th stores, according to GlobalData research.TJX has plans for 1,700-plus more stores globally, ultimately reaching 7,000. In 2026 the retailer plans 146 net new stores, with over 100 of them in the U.S., TJX CEO Ernie Herrman said earlier this year. The company already consistently accrues merchandise from top luxury labels, according to Bloomberg Intelligence Senior Retail Equity Analyst Mary Ross Gilbert. Losing Saks Off 5th as an option to unload their own excess will mean even more available to TJX, she said.“I see all the high-end designers. I see Celine, I see Bottega Veneta, I see Gucci. Probably three years in a row I've seen tons of Gucci stuff,” she said by phone. “But I see all the major brands, so they're all using TJ.” </div>

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Saks Off 5th is closing its off-price business following Saks Global's bankruptcy, with only a dozen stores remaining to clear inventory. CEO Geoffroy van Raemdonck emphasizes a shift towards luxury, but analysts warn that abandoning off-price customers may be unwise. Competitors like Nordstrom and TJX are expanding their off-price offerings, potentially benefiting from Saks' exit. Experts suggest Saks' operational issues contributed to its struggles, making the decision to scale back logical but a missed opportunity in a growing market.

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Saks Off Fifth may be gone, but its customers aren’t. Here’s where they’re going.