Taking Back Fifth Avenue

A $250 million revamp of Saks’ Manhattan flagship is the tip of the spear in the hypercompetitive department store wars.

- Phil Wahba

ASCENDING A SLEEK NEW MULTICOLORED escalator, designed by Dutch architect Rem Koolhaas, Saks Fifth Avenue president Marc Metrick is a man vibrating with excitement ahead of the store’s grand unveiling. The escalator’s bright red and blue hues and a large LED ceiling, which creates the illusion of a blue sky, pop in sharp contrast with the gray curtains used to cordon off a dusty construction area. Change is afoot on the ground floor of one of Manhattan’s most iconic department stores.

This sense of theater epitomizes what Metrick—who has been president of the HBC-owned Saks since 2015—is convinced the company has to offer today’s shoppers, particularly at its 650,000-square-foot New York City flagship.

The dazzling new escalator connects the street level—for decades home to a beauty area teeming with sales staff trying to spritz you with perfume—to an opened-up second floor. The new street-level space is a 53,000-square-foot emporium for leather goods and handbags, what Metrick calls the “gateway drug” for luxe shoppers. By late summer of this year, the renovations will include The Vault on the lower level, once a storage basement but soon to be home to Saks’ priciest jewelry, like Chopard watches.

The buzz of activity comes at a time when Saks has some wind in its sails, after going through a rough patch three years ago. Sales were declining quarter after quarter. It was losing market share, and the grande dame of New York luxury, a fixture since 1924, had lost much of what made it stand out.

But in the past two years, sales have grown seven out of eight quarters, and recent results have bested those of two major rivals— Nordstrom and Neiman Marcus.

The luxury market might be crowded, but it is booming. According to Bain & Co., the U.S. personal luxury-goods market rose 5% last year, to $85 billion.