Luxury US department store business Saks has posted a loss of $54.5m (£32.9m) in the three months to August 1, as its well-heeled shoppers spend less in the downturn.
The figure compares with a $32.7m (£19.8m) loss in the same period last year. Total sales fell 15% to $561.7m (£341.5m) and like-for-like sales dropped 15.5% over the three months.
Saks is famous for its flagship Saks Fifth Avenue store in New York. It was the subject of takeover rumours last year, after the now defunct-Baugur snapped up a 9.4% stake in it.
To counter the effects of the downturn, Saks implemented an aggressive markdown strategy. Gross margin dropped from 34.6% to 29.9%.
The news came as it was revealed that US retail sales fell in July, following two months of rises, as fears of unemployment impacted consumer spending.
Sales dropped 0.6% in July excluding car and auto parts.
Saks’ flagship New York store has been hardest hit in the downturn, due in part to the effect of the recession on the city’s wealthy bankers and their wives.
The retailer’s range of lower priced Off 5th stores fared better than the core Saks brand.