Saks Inc. said yesterday that R. Brad Martin, the architect of the company’s ill-fated expansion, would relinquish his role as chief executive, paving the way for his hand-picked successor to try to revive the fortunes of the company’s troubled Saks Fifth Avenue division.
Martin will retain the title of chairman and continue to have oversight through 2006 of several management functions, including the potential sale of Parisian, a chain of middle market department stores Saks put on the block yesterday.
Martin’s decision to step aside, which was voluntary, according to industry sources, falls short of the broad management shake-up that some shareholders had advocated.
His successor, Stephen Sadove, a marketing executive who has served as Martin’s close No. 2 since 1998, appears to have won an internal battle with Saks Fifth Avenue chief Fred Wilson, who resigned yesterday after his job was eliminated.
Whereas Wilson was seen as a divisive figure who pitted underlings against each other, Sadove is considered a morale builder and an all around “nice guy,” according to sources, but one with limited retailing expertise.
“Sadove is merely an extension of Brad,” said Parker Phillips of Bondurant Management, which owns Saks shares.
Investors nevertheless bid up Saks shares yesterday on the hopes that a streamlined management would have more luck rejuvenating and eventually selling the beleaguered Saks Fifth Avenue chain, which has been unable to regain its former luster despite previous management shakeups.
Saks shares yesterday closed up 85 cents, or 4 percent, to $18.71.
Martin’s reduced role brings to an end one of the more remarkable careers in retailing. Starting with a chain of 10 stores in 1989, Martin snapped up regional department store rivals in an acquisition spree that culminated with the 1998 purchase of Saks Fifth Avenue.
But the synergies of combining middle market department stores and a luxury chain never materialized, and the problems Martin inherited at Saks Fifth Avenue, which had lost its way, only worsened.
Faced with a lagging stock price, Martin set about disbanding the company he created, by selling the Northern and Southern department store divisions last year.
‘Saked’
Besieged Saks is a lot thinner up top after a management shakeup amid tensions that were the subject of a Post report in November.
Taking stock of trouble
* Four years of earnings are restated amid federal accounting probe.
* R. Brad Martin’s brother, Jeffrey, and others are asked to resign over vendor problems.
* Profitt’s, McRae’s and Northern group stores are unloaded, thwarting consolidation goals.
* Upscale Parisian chain put on the sales block
* Saks offloads Fred Wilson, kicks Martin upstairs and gives reins to Steve Sadove.
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$18.71
+85 cents