Chairman and chief executive officer, Saks Incorporated
Education: University of Memphis, BA, 1976; Owen Graduate School of Management, Vanderbilt University, MBA, 1980.
Career: Proffitt's (later became Saks), 1989–, chairman, president, and general-merchandise manager; chief executive officer.
Address: Saks Incorporated, 750 Lakeshore Parkway, Birmingham, Alabama 35211; http://www.saksincorporated.com.
■ R. Brad Martin was best known for his leadership of Saks Fifth Avenue, the beleaguered luxury retailer. The chairman and chief executive officer of Saks Incorporated, he struggled to keep Saks Fifth Avenue afloat amid low sales, industry criticism, and uncertain chain identity.
The parent company's 383 midmarket regional stores operated under the names Proffitt's, McRae's, Younkers, Parisian, Herberger's, Carson Pirie Scott, Boston Store, Bergner's, and Saks Off 5th, along with a mail-order business, Folio, and the luxury chain Saks Fifth Avenue. Saks Incorporated was listed on the New York Stock Exchange with a market value over $4 billion. In 2004 the company had 55,000 employees, $5.9 billion in revenues, and the number of department stores had decreased to 240.
Martin spent the 1970s and 1980s as a Tennessee state representative, and he also made a fortune in real estate. He then decided to try his hand in the retail sector. Martin was the principal investor in the group that acquired Proffitt's in 1984. At that time the company operated five department stores in metropolitan Knoxville, Tennessee, with annual revenues of approximately $40 million. When Martin joined the company's management in 1989, Proffitt's was a $75-million company.
Martin applied his political wheeling and dealing skills to the boardroom. BusinessWeek called him a "savvy dealmaker with a thirst for acquisitions" (July 3, 2000). He first made his mark in regional midmarket stores and purchased Carson Pirie Scott, Herberger's, and Parisian. In 1998 he acquired the troubled Saks Fifth Avenue chain for $2.1 billion, adding around 360 stores in 39 states to his corporation. At the time, Saks was the fourth-largest department store in the United States, with annual revenues over $6 billion. The purchase moved him into the ranks of luxury retailers. Forbes called Martin "a numbers guy with a knack for consolidation and cost-cutting [and] just-folks southern manners" (January 21, 2002).
Martin's success in the midmarket department stores did not transfer to Saks Fifth Avenue, his supposed cash cow. Neiman Marcus and Kohl's were formidable rivals to Saks Fifth Avenue, and the new chain struggled for a couple years while sales continued to fall. To boost sales Martin introduced new clothing lines and promoted in-house expert Christina Johnson to chief executive of the chain. He also consolidated operations such as credit-card processing, legal services, and logistics. To motivate company buyers, he created a new compensation and bonus plan tied to performance. Construction costs for new stores were also cut.
Martin tried to create a cozier feel in the revamped stores with coffee shops and more colorful decor and by adding a less-pricey clothing line. His take on luxury was unique: "Luxury does not need to be exclusive or aloof, or, could we say, snooty" ( BusinessWeek , September 9, 2002). To appeal to more customers, Martin invested $30 million in an e-commerce site to increase traffic to the store and provide more products to current customers. He spent tens of millions of dollars on the Web site, which generated at most $25 million a year in income. Martin pushed forward despite negative results, firing many Saks veterans in the process. In 2003 he began to add youthful, more stylish shoes and jeans to attract teens and younger women. In January 2002 Forbes accused Martin of "mixing mass with class" and "suffering from an identity crisis" because of its mix of teen styles with pricey adult items (January 21, 2002).
By 2002 Martin's luxury purchase was still afflicted by recession, increased competition, and $1.3 billion in debt. Though this caused him to sharply scale back on planned expansion, between 1998 and 2002 Martin opened 14 new Saks Fifth Avenue stores, expanded 12 more, and closed four. In July 2002 he was forced to sell the Saks credit-card operation to Household International. Saks Fifth Avenue was hard-hit by the drop in tourism to New York City following the terrorist attacks on the World Trade Center in 2001.
Martin told BusinessWeek that "It's taken longer to get to where I wanted, but I'm pleased with our progress" (July 3, 2000). But analysts commented that the company had spread itself too thinly with its new acquisition, and that marketing and the Saks image needed work. The company appealed mainly to older, wealthy shoppers and failed to incorporate differences in regional tastes. Martin tried opening stores in second-tier markets and adding moderately priced store brands. To assist him, Johnson accounted for the chain's problems when she trained her buyers and looked at contemporary clothing lines for the new stores.
Saks Incorporated made a small profit in 2002 and then lost $45.8 million in the first half of 2003. Wall Street pressured Martin to sell off the sickly Saks Fifth Avenue, to which he responded, "Ain't gonna happen" ( BusinessWeek , September 9, 2002). In 2003 he brought in a former Bristol-Myers Squibb president to streamline the organization, create management teams, and increase communication among groups within the corporation. Only two new stores were planned through 2005.
See also entry on Saks Inc. in International Directory of Company Histories .
Grow, Brian, "Saks Fights Off the Ravages of Age," BusinessWeek , September 9, 2002, http://www.keepmedia.com/pubs/BusinessWeek/2002/09/09/25871?from=search .
Pascual, Aixa M., "Still Seeking Synergy at Saks," BusinessWeek , July 3, 2000, http://www.keepmedia.com/pubs/BusinessWeek/2000/07/03/23711?from=search .
Wells, Melanie, "He Stoops to Conquer," Forbes , January 21, 2002, http://www.keepmedia.com/pubs/Forbes/2002/01/21/198111?from=search .