Iconic retailer Saks reports net loss of $154.9 million

26 Feb '09

5 min read

Retailer Saks Incorporated announced results for the fourth quarter and fiscal year ended January 31, 2009.

The Company discontinued the operations of its Club Libby Lu (“CLL”) specialty store business in January 2009, and the operating performance of CLL and expenses related to discontinuing the operations (primarily severance, inventory liquidation, store closure, and lease termination expenses) are presented as “discontinued operations” in the current and prior year periods.

Overview of Results for the Fourth Quarter and Fiscal Year:
For the fourth quarter ended January 31, 2009, the Company posted a net loss of $98.8 million, or $.72 per share. Excluding the after-tax loss from discontinued operations of $15.8 million, or $.12 per share, the Company recorded a loss from continuing operations of $82.9 million, or $.60 per share. The fourth quarter included the following after-tax items totaling $11.2 million, or $0.08 per share:

• charges of $6.2 million related to asset impairments,
• $6.4 million of severance expenses related to the Company's recent downsizing, and
• a net gain of $1.4 million related to the sale of two unutilized properties.

For the prior year fourth quarter ended February 2, 2008, the Company recorded net income of $39.5 million, or $.26 per share. The prior year fourth quarter included the following after-tax items totaling a net gain of $10.4 million, or $.07 per share:

• expenses of approximately $1.9 million for retention, severance, and transition costs related to the Company's downsizing and consolidation following the disposition of its Saks Department Store Group (“SDSG”) businesses,
• charges of $0.4 million related to asset impairments and dispositions,
• a gain of $8.1 million associated with proceeds from an insurance settlement related to the New Orleans store, which was destroyed in the aftermath of hurricane Katrina,
• a net gain of $1.6 million related to a Saks Fifth Avenue Off 5TH (“OFF 5TH”) store closing and the sale of an unused support facility, and
• a $3.0 million state income tax valuation adjustment (credit).

For the fiscal year ended January 31, 2009, the Company recorded a net loss of $154.9 million, or $1.12 per share. Excluding the after-tax loss from discontinued operations of $32.2 million, or $.23 per share, the Company recorded a loss from continuing operations of $122.8 million, or $.89 per share.

The fiscal year included the following after-tax items totaling $26.2 million, or $0.19 per share:
• charges of $7.0 million related to asset impairments,
• expenses of approximately $6.7 million for severance costs related to the Company's recent downsizing and the July 2008 Saks Fifth Avenue Ft. Lauderdale store closing,
• a net gain of $2.1 million related to the sale of three unutilized properties, and
• the write-off and adjustment of $14.6 million of certain deferred tax assets primarily associated with Federal Net Operating Loss tax credits that expired at the end of fiscal 2008.

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