Saks Fifth Avenue Brand Heads to Costco: Sources
The Saks Fifth Avenue brand is headed to Costco, according to market sources.
The Saks Fifth Avenue brand name has been licensed to Centric Brands for men's apparel and is headed to Costco over the coming months, sources said.
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A spokeswoman for Saks said she had 'no comment,' and a Centric Brands spokeswoman declined comment. Costco, the membership-based warehouse club, didn't return a phone call seeking comment.
Saks Fifth Avenue women's merchandise is expected to eventually come to Costco as well, but a recent deal didn't come to fruition.
Centric Brands' portfolio includes Joe's Jeans, Buffalo, Hervé Léger and Izod in the men's and women's categories. The company has expertise in product design, development and sourcing, retail and digital commerce, marketing and brand building.
Costco over the years has carried such brands as Tommy Hilfiger, Wrangler, Eddie Bauer, Nick Graham, Adidas, Nike, Banana Republic, and Columbia, in addition to its own Kirkland brand.
Last October, Saks Global and Authentic Brands Group formed a joint venture to grow luxury brands. The new venture, called Authentic Luxury Group, was initially expected to focus on Authentic Brands-owned luxury and accessible luxury names including Barneys New York, Judith Leiber Couture, Hervé Léger and Vince.
It is believed the Saks-Costco deal emanates from this new joint venture. Authentic could be collaborating with its longtime partner Centric on the Saks arrangement with Costco. On Tuesday, Authentic tapped Centric Brands as Dockers' operating partner across key lifestyle and performance categories in the U.S. and Canada, as reported.
Last fall, the principals of the Authentic Luxury Group outlined several ambitious plans and aspirations, such as rolling out Barneys retail locations or in-store shops, adding categories to existing fashion brands in the Authentic portfolio and widening their distribution in the U.S. and abroad, and purchasing brands. Essentially, the new luxury group is intended to serve as an incubator for brand growth through strategic licensing agreements and distribution channels across fashion, retail, digital, hospitality, real estate, art and travel, according to the joint venture.
In December, Saks purchased competitor Neiman Marcus for $2.7 billion — with help from Amazon, Authentic, Salesforce and G-III Apparel Group, and an eye toward forging a luxury powerhouse both online and off. The business is currently being reset and looking to reverse sales declines. Revenues at Saks fell 20 percent last year due to 'disrupted inventory flow.' Saks Global said May 14 it will slash 500 to 600 brands that don't work within the portfolio.
Having the Saks Fifth Avenue nameplate at Costco is irking some contemporary vendors who sells Saks.
'You can't take a prestigious name like Saks and put it into Costco,' said one vendor who does a lot of business with the Saks stores and feels it's bound to further hurt the prestige of Saks. 'They want to generate revenue using the trademark,' he said.
The vendor added that people aren't going to want to go into Saks anymore to buy high-end brands like Prada if they see the Saks Fifth Avenue label at Costco. 'Where is luxury going?' he asked.
In recent months, Saks has been working with Amazon to get designer fashion on the e-commerce site in a much more substantial way with the launch of Saks on Amazon, a storefront on Amazon's Luxury Stores platform. The Amazon storefront launched with looks from Dolce & Gabbana, Balmain, Etro, Stella McCartney, Giambattista Valli, Erdem, Fear of God, Jason Wu Collection, Rosetta Getty and Johanna Ortiz, as well as Chantecaille and La Prairie in skin care.
In the months ahead, more brands are set to launch on the Saks storefront, which will carry a selection of women's and men's ready-to-wear, beauty, shoes, handbags and accessories curated by Saks. Orders will be fulfilled by Saks, but customer service will be handled by Amazon's Luxury Stores. Amazon will also handle returns.
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