Saks Fifth Avenue Chairman Melvin Jacobs expects an economic rebound later this year, but he's not waiting for it. Despite the worst retail environment in decades, Saks is expanding operations to get a jump on its weakened competitors. The New York retailer, flush with a $300 million equity infusion from Saudi parent Investcorp, says it is going to pay down $150 million in debt, open as many as half a dozen new stores, and renovate several more.
Considering the plight of Saks's rivals, the company's announcement caught many in the retail community off guard. "It's a bit of a shocker," says Gilbert Harrison, a retail investment banker. But others applauded the plan, especially since Saks, backed by Investcorp, appears to have the financial wherewithal to carry out its strategy.