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Earnings Roundup / Saks

Luxury retailer swings to a loss

February 26, 2009|Times Wire Reports

Saks Inc. reported a loss for its fiscal fourth quarter as the luxury retailer was forced to slash prices to hold on to affluent shoppers who have cut their spending in the recession.

The company also issued a downbeat sales forecast. But its shares surged 13% after company officials said Saks had sufficient liquidity to pull through 2009. The New York company's chief executive dispelled rumors of a possible bankruptcy filing.

Saks is "very much focused on improving our operations, ensuring we are free-cash-flow positive in 2009 and on positioning us for the future," CEO Steve Sadove said. "Bankruptcy would destroy shareholder value; our intent is to increase shareholder value."

The retailer, which operates Saks Fifth Avenue, said it lost $98.75 million, or 72 cents a share, in the quarter ended Jan. 31. That compares with a profit of $39.47 million, or 26 cents, a year ago.

Sales dropped almost 15% to $835.5 million.

Saks shares rose 24 cents to $2.09.

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