Saks Tailors Retro Logo to Its Strategy

Saks is using the square shape in everything from business cards to gift cards. (Saks Fifth Avenue)

Saks Fifth Avenue wants to be square.

That's the shape of the luxury department store's new logo, as well as everything from its gift cards to business cards. It is the basis of an extensive marketing campaign launched this month that company officials hope will signal Saks's return to its core customer after years of turmoil in the upper ranks that alienated shoppers.

Chief executive Steve Sadove has made it clear that he wants to cater to wealthy women between the ages of 35 and 55 with classic tastes. The chain has suffered something of an identity crisis over the past few years, veering between edgy young shoppers and older traditionalists. That confused customers, and market share diminished.

Though Saks has stabilized over the past year under Sadove, it remains to be seen whether the changes have rekindled shoppers' loyalty.

The retailer has three locations in the Washington area: separate stores for men's and women's merchandise in Chevy Chase and a combined store at Tysons Galleria. The Maryland locations are among the top performers in Saks's chain of 54 stores. They have been shopping destinations for the region's wealthy and helped attract a stretch of high-end boutiques that opened last spring, creating what some have dubbed Washington's own Rodeo Drive along Wisconsin Avenue.

The new logo is meant to be a visible emblem of Saks's internal changes. It is a sleeker version of one used in the company's glory days in 1973, putting the elaborate cursive script inside a square black box. (One company executive likens the process to liposuction.) It then can be blown up and cut into smaller squares so that it looks almost abstract, just the swish of the "S" or the tail of the "F." The goal is to make it as recognizable -- and as coveted -- as Louis Vuitton's LV or the Burberry check.

But some retail experts are wondering if Saks may be announcing its reinvention prematurely.

"You're not going to be able to just design something to do that," said Marshal Cohen, chief industry analyst for market research firm NPD Group. "They still have to keep the store experience at the right level and have the merchandise speak for itself."

Saks's problems in recent years began at the top with a revolving door of chief executives. Christina Johnson stepped down in 2003 after she was unable to keep pace with rival Neiman Marcus. Next came Fred Wilson, formerly of Donna Karan. He was plagued by an accounting scandal that resulted in the resignation of several top executives and rumors that the chain would be sold. He was ousted in January 2006, and R. Brad Martin stepped down as chief executive of parent company Saks Inc.

Saks chased after younger customers who craved edgier fashions, axing its popular petites department and angering loyal shoppers. Away went its $60 million private-label clothing line, Real Clothes, with weekend T-shirts and sweater sets, replaced in fall 2005 with a "Wild About Cashmere" campaign -- complete with faux goats inside stores. The concept flopped.

According to a survey by consulting firm Luxury Institute, 81 percent of wealthy consumers recognize the Saks brand, only 1 percentage point behind competitor Neiman Marcus and 4 points behind leading brand Nordstrom. But in terms of exclusivity and social status, Saks ranked in the bottom half of major luxury retailers.

Sadove has spent the past year trying to restore the chain's credibility, particularly with its core 35-to-55 demographic. Sadove has estimated that they make up between 60 and 70 percent of Saks's clientele.

"The foundation of our business is that classic customer," he said during recent interview in his Manhattan office. "Being firmly rooted on the high end keeps us rooted in what Saks is."

The company launched a private-label Saks Fifth Avenue collection with Signature, Classic and Sport lines. The petites section has returned. The travel budget has increased, and Sadove has met with more than half of local store managers to tailor merchandise to their markets.

The results so far have been positive. Monthly sales at Saks stores open at least a year, a key measure of success in retail, were stronger during the holidays than they had been in two years. Profit has also rebounded, reaching $6.2 million during the third quarter of 2006, up from $225,000 during the comparable period in 2005.

"I think their management is highly enlightened now," said Milton Pedraza, chief executive of Luxury Institute. "They saw the abyss, and I think they walked away."

Sadove said he believes the time has come to relaunch the brand around the logo, with its bold print and graphic strokes inside dark squares. The logo can be reduced to such small print it calls to mind a Harris tweed. The possibilities are many -- maybe even a logo umbrella, Sadove said. The retailer is partnering with fashion designers to create clothing and accessories based on the logo.

The changes may seem small, cosmetic even. But Saks is hoping that they have a major psychological impact.

"It's about the reputation," Cohen said. "What they're really trying to do is show that they're new and improved."