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Saks Uses Grid To Find Right Store Mix, Sales Up

Saks Fifth Avenue CEO Steve Sadove's efforts to overhaul the selection of clothing and accessories at the company's 54 stores around the country appear to be paying off. For seven of the past eight months, sales at stores open at least a year have risen more than those at archrival Neiman Marcus' 38 stores.

Having the right merchandise is the key to Sadove's strategy for turning around the tony department-store chain that stumbled in trying to attract young women with what one analyst described as a "Hollywood bling-bling look." To be successful, Saks faces the challenge of figuring out who its core customers are--and research has shown that they differ significantly around the country.

Saks is using a nine-box grid to determine the right mix of styles and accessories for each store. On one side of the matrix are style categories such as "Park Avenue" classic or "Soho" trendy. On the other are pricing levels, from "good" (brands such as Dana Buchman) to "better" (Piazza Sempione) to "best" (Chanel). By cross-referencing the preferred styles and spending levels at each location, the grid charts what to stock where.

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