Saks just announced it's cutting 1,100 positions, or 9 percent of its workforce. The company will also eliminate merit-based wage increases in 2009, suspend 401(k) contributions for at least a year, and suspend future benefit accruals for employees on the pension plan. By doing so, they expect to save from $50 million to $60 million. Saks chairman and chief executive officer Steve Sadove stated these are the most difficult economic conditions the 84-year-old company has faced:

"It is our expectation that the economic environment will remain extremely challenging through 2009, if not beyond...The cost and capital expenditure reductions are structured to minimize the impact on our customers, and the reduction in inventory receipts is reflective of the decrease in consumer demand. Each of our actions will benefit 2009 and should better position the company for the future, when economic conditions improve."

Most job cuts will take effect January 30. With the ongoing 80 percent off sale, we hope the company survives.

I have two close friends that work at two different Saks stores here in Dallas and they started laying off yesterday. One of my friend's managers was let go yesterday and her store reduced their hours and will probably close soon. Neiman's is also laying off. I've heard this is the first time EVER that either company has had mass layoffs.

In other news...

Circuit City to be liquidated
Posted Jan 16 2009, 11:15 AM by Anthony Mirhaydari

Tired of fighting activist investors, merger offers, and creditors, Circuit City (CCTYQ) can no longer avoid the inevitable.

The second-largest electronics retailer will be liquidated after it failed to attract a buyer. All 567 U.S. stores will be closed. Roughly 30,000 workers will be laid off. Shareholders will be wiped out.

According to reports from the WSJ, three potential bidders were interested in the beleaguered retailer and continued bidding for the company's future at its New York law firm late into the night on Thursday.

At one point, San Francisco-based private equity firm Golden Gate Capital emerged as the leading bidder. Mexican billion Ricardo Salinas Pliego was also in the running after buying 28.5% of the retailer's stock subsequent to its Chapter 11 filing in November. In the end, a dismal holiday sales season, inadequate cash levels after liquidating 155 stores, and strengthened competitors frightened off the suitors.

Despite massive government intervention in the banking system, tight credit conditions have added to the troubles the retail sector faces. Since last January, not a single retailer filing for creditor protection has been successfully able to restructure and remain in operation. Those forced to liquidate include Mervyn's, Linens 'n Things, Sharper Image, Steve & Barry's, and Goody's Family Clothing.

This is just the beginning of the retail sector's slow and painful adjustment to the newly frugal and deleveraged American consumer. Savings and retirement accounts must be rebuilt out of current income, consumer credit and mortgage debt must be reduced, and the asset heavy household balance sheet will need to be liquidated. All of this is highly deflationary, which will only complicate matters as consumers withhold purchases in the hopes of lower prices tomorrow. With all the going out of business sales, they'll get just that.

In the end, as I've said before, those retailers able to ride out this storm will emerge bigger and stronger as they gain pricing power and market share. Beneficiaries of the Circuit City's demise include Best Buy (BBY), Wal-Mart (WMT), Amazon (AMZN), and Costco (COST).

The consumerist blog doesn't shed a tear, saying "goodbye, to the dirty, the poorly stocked, the indifferent, the incompetent, the irrelevant." They also created a nice timeline to destruction that I've posted below. The beginning of the end was the firing of experienced sales associates nearly two years ago, thereby eliminating whatever competitive advantage the retailer had over lower priced competitors.

^^^ Hun, this is already it's own thread.
[Edited 1/16/09 14:19pm]

depression is coming.....

Anybody got a good recipe for Ole Boot??

728huey said:

Yikes, it's scary falling from grace.

All these stores closing and laying off people

The market bears itself out. You can't keep overcharging people for stuff and it not eventually take its toll.

Damn, first Circuit City, now Saks. Who will be next?

so many job loses!

psychodelicide said:

WalMart...

Think global, shop local.

Buy American!

Support Local Small Business.

RenHoek said:

There is a Saks a few doors down from my work, it is almost always empty. I have always wondered how they kept in business? I went in once, when they first opened, prices made me keep on walkin'!

JerseyKRS said:

Depression is already here, imo


Smooches;)

Vendetta1 said:

Exactly...

who the hell shops at Saks anyway...

except for my mother in law

GetAwayFromMe said:

Geez, judge much? It's not like they force people to shop there, so, obviously, there's a market for what they sell. And since they've been successfully operating for 84 years and this is their first time doing mass layoffs it sounds like they've been pretty smart over the years. How many other companies can say that?

RenHoek said:

Yeah, wouldn't it be great if the company that employs more people than any other entity in the US were to go under???

SCNDLS said:

Obviously, there's not a market. Otherwise they wouldn't be laying people off. I suppose you shop there, right?

I lost my job too....it's crazy.

GetAwayFromMe said:

Ummmm, no there's not a market NOW, but they've been open for 84 years successfully. How many companies can make that claim???? And in case you haven't noticed, other companies are laying off too. So to infer that Saks is having difficulty just because they sell luxury goods is kinda silly IMO.

NOBODY is selling ANYTHING right now. And your comment sounded to me like you were judging them solely because they sell luxury items. You didn't make a snide remark about Circuit City closing ALL its stores and putting 30,000 people out of work. That seems like a much bigger failure IMO. But I guess because people that are viewed as the "haves" shop at Saks it's perfectly fine for THEIR employees to lose their jobs. Gotcha!

Oh, and YES I do shop there and I have many good friends that work there as well, who are probably losing their jobs this weekend. So, go ahead with your judging and do your happy dance if that's what makes you feel good.
[Edited 1/17/09 10:10am]

728huey said:

This. Plus 9 months later 12/21 $1 million in Retention Bonuses as well as $208 million loss, all on the same day? Oh yeah. Get rid of the solid back-bone of your company 3,400 employees. Replace them with workers that won't produce the same atmosphere as the one's you fired. Then give your executives bonuses, knowing well that the company is on it's way out. No wonder Block Buster backed out.

The formula for failure IMO is: G + r + e + e + d

For all families effected by current financial woes. May they find employers that abide by the "servant theory".

I'm sure that there are still honest companies out there. I'm not jaded, yet.
But I feel that sooner, rather than later we must give the bater system a try. We can't rely on corporate America to continue sinking it's citizens into un-necessary financial ruin, in the name of greed. Rant, over.

Opps...Thanks for the chart 728huey.
[Edited 1/17/09 10:15am]

Boriqua1130 said:

When they laid off those experienced employees I KNEW it was just a matter of time before they closed, plus they couldn't compete with Best Buy and Walmart.

SCNDLS said:

That was a major blunder. I'll bet those workers would have taken a temporary pay cut. Or waited for a raise, until the boat stopped rocking.

There's nothing scarier than power in the hands of morons!

Boriqua1130 said:

And most CEOs are out of touch morons that make many decisions based on securing their OWN bonuses. So screw the comapny and the workers as long as I get mine.

SCNDLS said:

Why do you care so much about what I think?

Saks to me represents gross materialism, and I wouldn't lose any sleep if it were to shut down completely. I guess you're so defensive about it because you won't be able to shop there anymore?

Why don't you find people who agree with you instead of trying to argue with people who don't? Wouldn't that be more enjoyable for you? Besides, you're not going to be able to change my opinion.

Stupid laptop keys
[Edited 1/17/09 11:22am]

SCNDLS said:

That's the truth, SCNDLS.

GetAwayFromMe said:

Trust me, I really don't care what you or anyone up in here thinks about me cuz it impacts me in NO way whatsoever. And I don't NEED for anybody to "agree" with me. I guess it's easier for you to attack me personally than to actually discuss/debate the issue in the thread that *I* created. I was simply responding to your comments cuz I thought that's what we did here. But, don't worry, I won't make that mistake again. . . Plus everything about you screams
[Edited 1/17/09 11:30am]