Department Store Wars

Summary

Fashion People Podcast Summary: "Department Store Wars" (April 11, 2025)

Hosted by Lauren Sherman of Puck, this episode features an in-depth conversation with Mark Metric, CEO of Saks Global, discussing the complexities and ramifications of Saks Fifth Avenue's integration with Neiman Marcus Group.

---

1. Introduction

Lauren Sherman opens the episode by introducing Mark Metric, the CEO of Saks Global. She sets the stage for a comprehensive discussion about the recent merger between Saks Fifth Avenue and Neiman Marcus Group, highlighting the challenges and strategic decisions involved in integrating these two iconic department stores.

---

2. Mark Metric's Background

[07:35] Mark Metric:
"I grew up in an investment banking family, and when it was time to graduate, my father advised me to pursue a real job to gain real-world experience. That's how I landed in the executive training program at Saks in 1995, and I've never looked back."

Mark shares his journey from an investment banking background to becoming a pivotal figure in the retail industry, emphasizing his long-term commitment to Saks.

---

3. The Saks Fifth Avenue and Neiman Marcus Merger

[10:36] Mark Metric:
"Getting Saks and Neiman Marcus together has always been the answer for the future of the business. Over the past 25 years, we've seen numerous attempts, but this merger is the culmination of strategic alignment and timing."

Mark delves into the history of merger discussions between Saks and Neiman Marcus, explaining that the integration into Saks Global was the result of persistent strategic efforts spanning decades.

---

4. Challenges During Integration

a. Vendor Back Payments

[29:41] Lauren Sherman:
"On February 14, 2025, you sent a letter stating that back payments to vendors would begin in July on a monthly basis, formatted as net 90 days. This upset many vendors. Can you explain why upfront payments weren't made despite having liquidity from the transaction?"

[32:06] Mark Metric:
"We had to manage our payables carefully. Integrating Saks and Neiman Marcus meant consolidating their financial obligations. Splitting back payments into manageable monthly installments was essential for maintaining liquidity and ensuring long-term sustainability."

Mark addresses the difficult decision to restructure vendor payments, highlighting the necessity of balancing immediate obligations with future financial health.

b. Customer Refunds Delays

[62:58] Lauren Sherman:
"Customers were frustrated with delayed refunds for online returns. How did you resolve this issue and return refund processing to a normal timeframe?"

[63:58] Mark Metric:
"We implemented advanced data analytics and machine learning to identify and prevent fraudulent returns. This allowed us to streamline the refund process, bringing it back to the standard five to seven-day cycle."

Mark explains the measures taken to combat refund fraud, ensuring a smoother and faster refund process for genuine customers.

---

5. Managing Store Fleet

[50:59] Lauren Sherman:
"Regarding the closure of the historic downtown Dallas store, can you elaborate on what happened and outline your broader strategy for managing the Saks Global store fleet moving forward?"

[56:05] Mark Metric:
"The downtown Dallas store was underperforming and required significant investment to revitalize. Given its strategic location and historical significance, our decision to close was not taken lightly. Moving forward, our strategy focuses on maintaining high-performing stores while rationalizing underperforming ones to optimize our footprint."

Mark discusses the rationale behind store closures, emphasizing the importance of investing in flagship locations while shedding less profitable stores to enhance overall performance.

---

6. Differentiation from HBC Issues

[58:30] Lauren Sherman:
"With Hudson's Bay Company (HBC) facing liquidation in Canada, how do you communicate that Saks Global is a separate entity and reassure stakeholders about its stability?"

[60:12] Mark Metric:
"Saks Global and HBC are two distinct companies with separate ownership and financial structures. Our strategies and operations are independently managed, ensuring that the challenges faced by HBC do not impact Saks Global."

Mark clarifies the separation between Saks Global and HBC, reassuring stakeholders of Saks Global's unique and stable position in the retail landscape.

---

7. Layoffs During Integration

[60:28] Mark Metric:
"As we integrate, there will inevitably be redundancies. Our approach is to handle layoffs thoughtfully and respectfully, ensuring that affected employees are treated with dignity and provided with support."

[61:15] Lauren Sherman:
"How are you balancing the need for layoffs with maintaining employee morale during this multi-year transformation?"

[60:28] Mark Metric:
"It's a delicate balance. We're committed to being transparent and compassionate, recognizing the hard work of our employees while making the necessary adjustments to build a stronger, unified organization."

Mark acknowledges the emotional and operational challenges of layoffs, emphasizing a compassionate and strategic approach to workforce reduction.

---

8. Future Plans for Saks Global

[73:46] Lauren Sherman:
"Looking ahead to December 2025, what does the new Saks Global look like, and what milestones do you aim to achieve by then?"

[73:57] Mark Metric:
"By December, customers will experience enhanced personalization through our integrated data systems. We're piloting inventory sharing across platforms and testing new loyalty programs to deepen consumer engagement. The transformation is underway, and we expect to see significant progress in creating a seamless and personalized shopping experience."

Mark outlines ambitious plans for leveraging data to personalize customer interactions, sharing inventory across platforms, and enhancing loyalty programs to foster deeper customer relationships.

---

9. Conclusion

Lauren Sherman wraps up the episode by highlighting the key insights from her conversation with Mark Metric. The discussion underscores the intricate balance between strategic mergers, financial management, customer satisfaction, and employee well-being in the evolving landscape of luxury retail.

Notable Final Quote:

[75:21] Lauren Sherman:
"I appreciate you, Mark. Thank you."

[75:21] Mark Metric:
"Thank you for having me. I love what you put out there."

---

This episode of Fashion People provides a transparent and insightful look into the challenges and strategies behind the Saks Global merger, offering valuable perspectives for industry insiders and fashion enthusiasts alike.

Transcript

[Alex Asulin]

Hi, I'm Alex Asulin and I'm inviting you to listen to Asulin's official podcast, Culture Lounge. For the last 30 years, Asulin has created books at the center of culture and luxury, covering everything from wine and watches to fashion, travel and Formula One. Now we're inviting you into our world through a new and exciting medium. Join me on Cultural Lounge, where you will hear intimate conversations with icons like Erin Lauderdale, Linda Fargo, Mario Carbone, curators from Sotheby's, and the world's best sommelier, all gathered like old friends at a beautiful bar, discussing their deepest passions, sharing stories, and giving us their best advice. It's like eavesdropping on the most interesting conversation you could ever imagine. Culture Lounge is available wherever you get your podcast. Tune in now to be inspired and learn something new.

[Lauren Sherman]

Are you tired of showing up to dinner parties with the same old uninspired bottle of wine? There has to be a better way to find unique wines that people will actually remember. That's why PSAMsation is a total game changer. Their expert team finds incredible wines from top independent producers, bottles you won't find at your local wine shop. These wines aren't mass produced. They're handcrafted with care, using pure ingredients and meticulous winemaking. And the best part? Sompsation's team of sommeliers curates every selection so you know you're getting wines that are truly special. Whether you want a single bottle, a full wine club membership, or even a guided tasting experience, Psalmsation makes it all easy and enjoyable. Explore [e-mail] FashionPeople hello and welcome to Fashion People. I'm Lauren Sherman, writer of Puck's Fashion and Beauty Memo Line Sheet. And today with me on the show is Mark Metric, the CEO of Saks Global. He's here to address the good, the bad, and the better of Saks Fifth Avenue's integration with Neiman Marcus Group. Before we get going, I wanted to remind you that if you like this podcast, you'll definitely love Puck, where I send an email called Line Sheet. If you're a fashion person, you get that reference. It's an original look at what's really going on inside the fashion and beauty industries. Line Sheet is scoopy, analytical, and above all, fun. Along with me, a subscription to Puck gains you access to an unmatched roster of experts reporting on powerful people and companies in entertainment, media, sports, politics, finance, the art world, and much more. If you're interested listeners of Fashion People get a discount. Just just go to Puck News. Fashion People to join Puck or start a free trial. Happy Friday, everyone. By the time you hear this, I should be back in Los Angeles. This week on Puck's line sheet, though, was another doozy. It never stops. Ever, never, ever stops. But if you only open one email from me this week, open Wednesdays. Rachel Sure's piece about Glossier's latest funding round is just really, really interesting because it says so much about the beauty industry, but also the fashion industry. Think about. In 2021, Glossier was valued at $1.8 billion. Now it's raising $100 million at a valuation that's about half of what it was before, so less than a billion dollars. So it's no longer a unicorn. And Rachel's sort of tracking of all this, it's just interesting to look at a business that has meant so much to the beauty industry, but also the fashion industry. I talked to tons of executives and in the last 10 years, pretty much all of them bring up Glossier as an example I've always thought of. I think Emily Weiss looked at companies like Patagonia and Nike and Apple as her inspiration. And in many ways, Glossier has achieved that, like, brand status level. But it's a startup and there's been a lot of challenges and Rachel really gets into them. So I think definitely read it and she's gonna be tracking it as, as things develop on the fashion end. I hope you get something out of this interview I did with Mark Metric, who is the CEO of the still new entity known as Saks Global. A refresher. In July 2024, Saks completed a $2.7 billion acquisition of the Neiman Marcus Group. And Mark gets into what has happened since. It's not been an easy ride. If you're on the consumer front, you might know about the fact that there were returns that didn't come as quickly as they should, refunds on returns that didn't come as quickly as they should. And then obviously, for anyone who works in the industry, probably know about this, back payments to vendors that are owed. So even if you don't know anything about this stuff, this conversation with Mark is a real lesson on sort of where the state of the industry is. We talk about tariffs, we talk about the business itself, we talk about what's going to happen to the business. And he is, I think, pretty honest. And so let me know what you think. And thanks to Mark for, for joining me on here. Mark Metric, welcome to Fashion people.

[Mark Metric]

Thanks for having me. Love being here. Big fan.

[Lauren Sherman]

So on Fridays, we the first Question we ask before we get to the serious questions is, what did you have.

[Mark Metric]

For breakfast every day? It's Catalina Crunch. And you know, I'm an early adopter. Okay. Because I'm a keto nut.

[Lauren Sherman]

You know, Mark, I've had Catalina Crunch.

[Mark Metric]

Are you a cinnamon toast or are you a dark chocolate? What are you?

[Lauren Sherman]

I like the mint chocolate.

[Mark Metric]

Oh, that's all right.

[Lauren Sherman]

But for me, that's like a dessert.

[Mark Metric]

Exactly. Same thing with the cinnamon for me. But dark chocolate's breakfast.

[Lauren Sherman]

But, hey, no sugar, so that's what matters.

[Mark Metric]

God knows what's in there.

[Lauren Sherman]

God knows. Lot of protein. We do know there's a lot of protein. Definitely some tapioca starch and many other starches that we've never heard of before.

[Mark Metric]

Exactly.

[Lauren Sherman]

But it's delicious. Shout out to them. So, Mark, I've been writing about you and your company for a really long time. I met you long, long time ago doing a story on Saks. And for the last two years since I've been writing this column, I've been tracking your work on basically a weekly basis or sometimes daily basis, depending on the news cycle. And I want to get into. Obviously, you're the CEO of Saks Global. There was an integration, a merger between Saks Fifth Avenue and Neiman Marcus Group last year. You run that now. There's been a lot of stuff that sort of happened post integration or during the integration that we're going to address today. But maybe before we get into that stuff, can you talk a little bit about how you ended up in the retail business and sort of what led. I mean, this is a. That's a whole podcast, but maybe your elevator pitch of what led you to being the CEO of this new group.

[Mark Metric]

Yeah, sure. I grew up in an investment banking family, and, you know, I went to Boston University, and I think I had too good of a time. And when it was coming time to graduate, I said to my father, all right, what investment banking program should I go into? And he said, are you kidding me? When are these people going to hire you? You gotta, you know, you gotta go out there, you gotta get a real job. You gotta learn how to. How to tie a tie. You gotta get responsibility. You gotta understand things. Then you can go back to business school. Then we can talk about if there's anywhere for you to go. And he said, because these retail, these department stores, they have training programs. You should give it a shot. And I fell in love. I mean, I went into the executive training program at SACS right out of college. I started in June 1995. And I haven't stopped or looked back ever since. And right place, right time, lots of change and lots of different owners and really sort of just worked my way through.

[Lauren Sherman]

So was there ever a period when you didn't work for Saks in one of its iterations?

[Mark Metric]

Yes. So in 2000, I think 11, I left Saks. Richard Baker hired me. I left Saks, actually not voluntarily. I actually left Saks because I had to get myself sober. Which is another podcast we can do.

[Lauren Sherman]

Yes. Or you can go on a podcast that talks about.

[Mark Metric]

I left on good terms. Exactly. I left on good terms, but I left and got my act together. And then Richard Baker hired me. And I think it's because he wanted to buy Sachs and I had been before I left chief strategy officer. So I was a good sort of asset to have with Richard as he was looking at buying, at buying the business. So there was a brief time, maybe a year and a half or so, where I wasn't affiliated with Sachs in the last 30 years.

[Lauren Sherman]

So there has been conversation about Sachs and Neiman Marcus merging since long before Richard owned Saks. And we should say Richard Baker is the chairman of Saks Global and another person I write about a lot who is, I guess, your boss.

[Mark Metric]

He's the executive chairman. And the difference is wild, right? Wild. Very big difference.

[Lauren Sherman]

I bet. And, but so when you. I remember I've talked to people who said that this was a conversation that was happening in, like 2008, 2009, that era, too. When was the earliest that you heard people, maybe nothing was actually happening, no talks, but, like, heard people discussing the potential of, like, those two companies being a part of a bigger group.

[Mark Metric]

Yeah, it was probably the late 90s, and then again in the early 2000s and then again in 2006. I tried, or I was part of the team with Steve Sadoff and Kevin Wells and Ron Frasch and that group that we looked to do something with Neiman's a few times, even before I joined hbc. So this was probably my seventh or eighth iteration of trying to get together with this company one way or the other, whether it was reverse merging, whether it was selling Sachs to Neiman, combination HBC buying Neiman, Sachs Global formation, lots of different ways of doing it, but getting these two companies together always has been the only answer. Maybe not always, but in my 25 years or so, been the answer.

[Lauren Sherman]

Why is that? Why did you feel like for so long that this being one entity was important for the future of the business?

[Mark Metric]

I think for A long time. And I'm a student of luxury. And if you listen to any of the other stories of some of these and you write about another, the LVMH business, for example, they sort of paved the way. And for a long time, there was no such thing as luxury at scale. Luxury was about small. Luxury was about bespoke and individualized and small. And it was because you couldn't deviate to the mean. You couldn't risk harming the brand by turning it into some kind of conglomerate. And LVMH came along in the late 80s and proved everyone wrong. They said, no, you can actually do this if you're smart, deliberate, you've committed to your strategies and you play the right balance. Luxury can win with scale. And then others followed. And, you know, whether it was Francois Pinault, obviously you have the LVMH folks and all of a sudden you had a lot of scale on the brand side, but the department store side were fighting with each other and competing with each other and spending a lot of money and time and caloric burn trying to edge out market share. And candidly, Lauren, we lost sight of the plot, which was the customer. And I always believed that department stores needed scale to not win. This isn't about winning. This is not about surviving. This is about delivering on a strategy. And you can't do that if you're too dependent and don't have enough structure behind you to execute. And when Richard bought Sachs in 2013, he knew, right. He knew before then that wasn't the end game, that Sachs. And he and I have this saying. Sachs was the box spring. And it's okay for the box spring to come first, but that mattress is necessary to make it work.

[Lauren Sherman]

Yeah.

[Mark Metric]

And that's what Neiman's was.

[Lauren Sherman]

So what has happened in the 25 years since you've been in the business, or I guess 30 years, that's sort of when you're talking about LVMH and Kering, the tremendous change in the way that the luxury business operated and the importance of those brands to consumers. And so in some ways that's great for a luxury retailer because they're more interested in fashion than ever. Lot of people who would have never thought of buying Loewe handbag. I mean, people know how to pronounce Loewe, so that's a good thing. But on the other side of it, there was this kind of direct to consumer revolution where Louis Vuitton and Dior and all those, they owned their own stores. I don't know about Dior, but Louis Vuitton and Gucci had stores prior to, you know, being part of a big group. But they started to really develop their stores, they would own them instead of going through a license. And so it's just changed the dynamic between a multi brand retailer, which used to be like a big driver of volume for these luxury brands and maybe still is, but usually in like a shop and shop concession model. It's not you buying Louis Vuitton bags at wholesale the way it used to be, or I don't know if it ever was with Louis Vuitton. But you know, my point being that like they have their own retail. So the kind of reason for the multi brand for these, these mega luxury brands has changed. And so that's also changed the your business. Right. And I would say it's been harder in some ways. Right, because you don't have like they have their own stores so you're not the only option. And therefore just. And also it's their, their margins are higher in their own store. So I'm just, I'm babbling. But how has that dynamic changed as these brands have become so big and powerful and also as they've opened their own retail?

[Mark Metric]

Yeah, I think you're right. I think, I don't look at it like a woe is me. I actually think just like the consumer, we've benefited from the creativity and the craftsmanship and everything that these brands have been able to do, it's been unbelievable. And you just think about the expansion, it hasn't happened by luck. It's again a strategy that all these folks have been committed to. It's interesting when you look at the raison d'etre to your point for department store, it's changed and it's become much more of an acquisition tool for some of these brands. Whether, you know, you're very close to the business, I'm very close to the business. We don't understand. It is quite intimidating for a consumer to just walk right into one of these boutiques, much less than it is for them to walk in to a Saks Fifth Avenue store, Neiman Marcus store. And I think over time what Saks and Neiman's became almost as important as a platform for revenue and commerce for these companies was to introduce their product to the consumer. And we did a lot of work, Lauren, in preparation for this, for this merger around how much Cross Shop exists and how much Cross Shop exists between the brands and the multi branded stores. And you'd be amazed at the percentage or the high Percentage of customers that buy these brands in sack stores, that do not shop at the directly operated stores. So for some reason, reasons I don't know, it could be loyalty, it could be, I grew up shopping at Saks or Neiman's or wherever. It could be the relationship you have with your stylist. For some reason, you buy all of your, you name the brand at these stores versus at those own brand stores, and it's a very, very high percentage. So we must be doing something right and we must be doing something right for these brands because candidly, and you said it, at the end of the day, they're making great product. And if we don't deliver a raison d'etre for the customer to shop with us, there is absolutely no reason why they shouldn't go directly to the, to the brand store.

[Lauren Sherman]

Well, I guess the big value is if you're looking for a dress, you want to try 15 different dresses on from 15 different brands. A multi brand retailer makes that easier. The challenge today is that a lot of people don't shop in stores. So it's. The online experience is important. And the other, the other question I have for you is in terms of you mentioned Sachs being the box spring and Neiman's being the mattress.

[Mark Metric]

Those are interchangeable, by the way.

[Lauren Sherman]

Okay, yes, let's, yes, let's not. I'm not being a whole favorites.

[Mark Metric]

Yeah.

[Lauren Sherman]

Why, why is that better for the market for them to be owned by the same? It's. I know it could be arguably better for you because you, you don't have as much price competition in discount competition, but why is that better for the market?

[Mark Metric]

Yeah, I think what's better for the consumer is actually us knowing more about that consumer. And if you go all the way back and you think about the genesis of whether it's online or offline, the shopping experience with a luxury store. Right. Thirty years ago, they knew your birthday, they knew your anniversary, they know what you bought last month, they knew what you bought last year. They had everything in a little black book. It was all there. And they had your card and you didn't need to take out your guard and you never needed to show your ID versus walking into like some, you know, moderate or mass department store. And like you were just one of a billion people. Over time, that mantle was actually lost because data and technology became the greatest equalizer. My grocery store knows my birthday, right? My, the, the place, you know, or Netflix makes recommendations to me or Spotify can make a playlist for me. So personalization became very sort of commoditized. And putting these two companies together has given us the deepest and richest data lake of luxury consumers out there. So now we know when you think about Lauren and what there is about her, we have every touch point we have how you come in, whether you use social, whether you use retargeted marketing, whether you came in through an email. We know what you look for in Neiman's, what you look for at Saks, what you buy at Saks, what do you buy at Neiman's, what you buy at Bergdorf. And we can build a DNA for you so that when you visit sacks.com, you have your own personalized homepage, or you visit neiman.com, you have your own personalized homepage. And you wouldn't be able to do that as just Saks or just Neiman's. And the biggest unlock we have right now is data. And especially in the world we're moving into, because AI, by the way, people are talking about models, they're talking about computing power. The whole victory with AI is going to be data and who's got the best. And that's been a big unlock from this combination.

[Lauren Sherman]

So looking back on the last 15 years of online retail, and you are lucky that you have physical retail as well, because we know now that that's just as important. But for a while it didn't feel that way. And also there were these big players who came out and Net A Porter Matches Fashion Farfetch were probably more recently my Theresa. There was this online luxury war that was happening and you were involved a bit. You spun out Saks.com during COVID as a strategy where that was gonna be a public company. So in the end, pretty much all of those businesses imploded. And Yuke's Net A Porter group is now gonna be a part of Mytheresa. Farfetch'd is relaunching and trying again. But Matches fashion doesn't exist. The reality is that, like, you know, from my perspective as a reporter, what I saw was these people raised way too much money for something that's probably should be half the size business that that they promised it would be. But in the end, like, and I remember Luca Silka, the luxury analyst, would always say, will there be a winner takes all in the online luxury race? In the end, there wasn't anyone. There really wasn't a winner. May you could. You could say my Teresa and Net A porte because they survived. And my Teresa sort of figured some bits of it out. But what did you observe during that period where you had a very robust online business and were competing against these companies? But over the last 15 years, what are you all doing differently to ensure you're not kind of chasing the same impossible goals?

[Mark Metric]

Yeah, I think, you know, if you go back to the, to the genesis of, of the online luxury, right? And I think that some of it was just focus, attention and capital. And you know, when you think in the late 90s when we launched Saks.com and at the same time you're thinking about what POS registers you had in your stores and what you're gonna, what chandelier. You had a clean in Phoenix and you had all the, you were competing for capital and IT resources, you were competing for profitability and you were publicly traded, whether you're Macy's or your Sachs or whoever. And then there's this upstart that's like, no, no, no, don't worry, we're going to value you just based on how much revenue you drive. So if you want to Deliver everything in 15 minutes in a velvet bag, hand delivered from a Rolls Royce, and you know, it's perfect product and it's great, that's who we were competing with. And that allowed. When you think about Porter's five forces, right. I hate to geek out on you, but when you think about sort of like, you know, what are the ways you can win and compete? Luxury had a force in it, which was barriers to entry forever. Luxury. You couldn't just start a luxury company and then all of a sudden you could. That popped up and you know the whole story of where you are. What I learned was there's no easy way in luxury. Luxury is about the experience, luxury is about serving the consumer, and luxury is about being there when the consumer wants you. And we did what we did at Saks and I have no regrets because we had to raise capital to catch up to some of these other players. I mean, we more than doubled our digital business at Sachs over the course of that separation and invested a great deal in our technology and our capabilities that we're using today that are going to enable this integration to happen faster and more efficiently. So, no regrets, but I learned that you need the stores and you need to be able to be consistent with the consumer because there's no quick wins in luxury.

[Lauren Sherman]

So you come out of COVID you finally put this deal together to make this acquisition of Neiman Marcus Group happen. How were you able to do it in the end?

[Mark Metric]

Oh, I give Richard a lot of credit And I think it was just timing. I think every other time I've been part of an attempted marriage, there's always been a reason. There's always been new ownership on one side or the other. There's always been market timing. There's always been a disagreement around valuation of either one of the companies. And then when we arrived and you sort of skipped the hardest four years and. Or the most dynamic four years, you're like, well, you came out of COVID and you got the deal done. That was amazing how you just, like, my. My dog didn't even exist except for that period. So, you know, I think you then came together with two companies that, you know, it was time for Sachs to do a transformative transaction in order to, you know, basically make sure we were positioned for growth. And then you had Neiman on the other side with, you know, they'd filed for bankruptcy going into Covid. So they had owners who tripped into the ownership through, through the bankruptcy, who were smart and deliberate people and good thinkers. But these aren't people that want to own businesses generally. So the timing was there. You had a willing seller and you obviously had a willing buyer. And that's not always been the case between these two companies. Even when we went 12 months worth of diligence, there was always one party that was a little bit unsure. This time you had two parties that were sure. So it wasn't about that. I think that the biggest. This was a complex transaction with many counterparties. We were doing it while a lot was going on in the world and a lot was going on at Sachs, which I'm sure we can talk about. And I'm very happy and I'm very proud of the team that got this done on both sides.

[Lauren Sherman]

Yeah, I mean, from reporting on it, it seemed tremendously complex. And there was many times when I didn't think it was gonna happen, but I also knew that. I just feel like your boss, Richard Baker, was gonna make it happen, was going to do everything he could to do this someday. So I guess that was the goal that was accomplished. The mission was accomplished.

[Mark Metric]

Yeah, I think. And, you know, I've worked with Richard a really long time, and actually, the one thing about him that is interesting is he's willing. I'm a lot less. I'm not a deal guy, I'm a retailer. He'll walk away. Like, he'll go 18 months on this deal. And if it's not right, if he doesn't feel right about it, it's like pens down. And that's it. So absolutely I agree with you that when he wants something, he'll find a way to get it done. But also if it wasn't going to work, he wasn't going to do it. If it wasn't going to be the right thing for his shareholders, for his associates. And, and I'm just, you know, I'm very happy that we got to where we got and it's, it was a wild ride for sure. I've been counted out, dismissed, passed over, told I'd never be a golfer with just one arm. But the only thing that feels better than proving people wrong is out driving them. I'm 14 year old golfer Tommy Morrissey and I want to be remembered for my ability as a champion partner of the Masters. Bank of America supports everyone determined to find out what's possible in golf and in life. What would you like the power to do? Bank of America bank of America NA Member FDIC Copyright 2025 bank of America Corporation all rights reserved.

[Lauren Sherman]

So you start working on the integration on January 1st and now we're going to kind of go through, let's just call this a Q and A session.

[Mark Metric]

Sure.

[Lauren Sherman]

Which are that when I'm asking you all the questions, I know my readers are going to say, why didn't you ask him this? Why didn't you ask him this? So let's just try to answer as many of the questions they're going to ask you. So you start January one. You do you make some announcements in January about people leaving the business that were expected to leave the business? No, nothing out of the ordinary. There were promotions, there was restructuring, then on Valentine's Day. So. So a big thing, maybe we should back up is that Saks Fifth Avenue owed a lot of its vendors or the brand partners, if you want to say it in a more gentle way, a lot of money. So for different reasons that maybe you can go into, but they owed them a lot of money. And the idea I thought was that when the merger happened there would be enough financing to be able to pay back the back payments that were owed and start over and get going. So on February 14, 2025, you send this letter and you say we're going to pay you back, going to make it happen, but we're not going to start paying you back till July and that's going to be on a month to month basis. So split up into monthly payments and then on top of that, from now on we're not going to pay you for 90 days. It was the letter read round the world and the reaction from vendors or brands that I heard, people were really upset. People didn't understand, as I've said many written many times, I think if you had said I'm going to do the I'm going to start payments are going to be net 90 instead of net 30 days to account for the fact that stuff on the floor doesn't sell in 30 days usually I think they would have been upset but accepted it. But the back payments, it really upset people. So can you just say why didn't you pay everyone up front like you had liquidity from the transaction? I would assume why didn't you just pay everybody off and, and start from scratch?

[Mark Metric]

Yeah, look, and, and well, thanks for bringing this up. And I forgot about that email actually. You know, I, I'll say this. You said that the integration started Gen1. People have to remember Saks.com, saks Fifth Avenue and Saxwell Fifth.com or we had our first. We had to integrate Saks. Saks was separate with separate balance sheets, separate systems, separate payables, separate everything. I was the CEO at the time of the Saks.com business. So I had a piece of it. And when we signed the transaction July 4th. Thanks. We didn't want to announce it until July 4th, but you ruined that by.

[Lauren Sherman]

Oh, I forgot about that.

[Mark Metric]

Yeah. Oh, see, you get to forget about things.

[Lauren Sherman]

You're only as good as your last story, Mark. So I'm like, oh, when did that happen?

[Mark Metric]

I blame my, my head of comms, Nicole Schoenberg for saying, wow, it's been really quiet. I think 15 minutes later you, you called. So we really had a start then cobbling together and putting together the whole organization and, and looking at data. And then if you Fast forward to the 23rd of of December, we closed on the transaction. We got our hands on all the Neiman's data and you know, I started immediately working on. Okay, and I think my brand partners would want to hear this. You know, that was number one priority was understanding what's the back payable, what do we owe the 90 day terms. And you said it. That was sort of, we were going to have to do something like that because it just candidly for a lot of reasons, for actually the longevity of the model, we had to make those changes. And I think you're right. I think by and large people understand that. Would it have been better for them maybe if there was more time or whatever? For sure. But we had to do it as fast as we had to do it. But as I got my Hands around everything that we were looking at. And I started to do the math. We just. And we were well capitalized and we still are, but we had to look at how much should be going out at once. How do we handle all the different invoices that are there? I don't want to bore you with the semantics of it. And the best thing to do was put a pin in the deferred and. Put a pin in the deferred and break that up into payments over time and start the 90 day terms right away. I think what's really shocked people was we had mentioned prior, once we close the deal, we will be able to get things cleaned up. And I think the deal closed a lot faster than. Well, you say you were surprised. We were all surprised when the FTC just waved us by in August. And we need and still do the time to work through not the paperwork, but the actual, you know, getting the money out the door and just getting it set up. And that's why we had to do what we did. But if I can just talk about why the memo and. Yeah, because, you know, people forget, you know, I spent 30 years in this business. I was running Sax with Avenue for a decade and you didn't hear my name a lot. I wasn't on the line sheet. I'd had a fight for real estate on there and I was a great partner and I was, you know, we were paying all our bills. But the one thing I always learned and knew, whether it was talking to my employees, whether it was talking to our partners, our shareholders, whoever. Transparency. And as soon as we close a transaction, that was the number one question. That was the number one question the buying team was getting. These people at Neiman Marcus who just joined Saks Global five minutes before were getting it. And I figured we owe these people, we owe our partners the answer. They might not like it, but this is the best I can tell them right now. And this is what I'm going to tell them. If I had to do it all over again, I would do it maybe different. You know, we have different words and the intention would be. Probably felt a little bit differently, but unfortunately the answer would be the answer. But the problem was for months and months and months there wasn't the transparency that these folks deserved. So I gave it to them. And not because they demanded it, but because we owed it to them.

[Lauren Sherman]

Can you just walk back for a minute and explain why you owed people so much money or companies so much money?

[Mark Metric]

I think it goes back to the pandemic and I think we had a call with the brands over the summer, but Saks Fifth Avenue, the stores shared a credit group with the Hudson's Bay business up in Canada. And in 2021 we separated at Saks the Ditchco from the Fisco which you and I talked about. And it was wildly successful. And you and I separate podcasts can can debate that, but it was wildly successful. And part of the wild success was not my brilliance as its leader or Richards as its architect, but maybe it was how the US consumer came out of COVID A lot of smart people in the retail industry in 2021. Right. But it was very successful. So the company felt and we raised all of the investment that we made through a private placement we did with Inside Partners where we raised $500 million for Saks.com and we put that money to work in marketing and technology and we invested and we built a team. And I think the company felt, hey, let's do this up at Hudson's bank. It's really working well here. They didn't raise the money, they did it themselves. And the Canadian consumer did not respond or come out of the pandemic. In fact, I think they still haven't responded to come out of the pandemic as well as the US and it's been slower. And they found themselves in a little bit of a pinch from a liquidity standpoint. And with a shared credit group, you know, we had to or sax with Avenue hbc us had to actually, you know, slow down payments in order to balance the liquidity of the entire group. Okay, so that's HBCUs. And I think from there that started sort of this, we slowed down or HBCUs slowed down payments, shipping slowed down. It becomes a flywheel. Business slows down and then it just piles up and piles up and piles up. And I think along the way there was always, there was always comfort in the US that the business would meet its expectations. There was never concerns in the US about the business. But again, with 30 day payment terms, even in a good day, it's hard. So there was just a lot of sort of, I'm going to call it one time event or pressure put on the US credit group. And that's how it sort of snowballed.

[Lauren Sherman]

Okay, and then second part of the question is really quickly explain why the 90 days make sense versus 30. Because I've heard different things. I've heard a lot of people who say, yeah, it's, it's never, I mean, Barney's went bankrupt in the 90s. So we remember when it went bankrupt in the 2010s but it also went bankrupt in the 90s. So clearly something is wrong with the model. But can you explain why the 90s makes a 90 days makes a difference?

[Mark Metric]

Yeah, I think, you know, and again when you, when you are me and you've been doing this for as long as. So when I started in Saxon 1995, there was no Internet. I mean I'm old Lauren, there was no Internet brands. As you mentioned, most brands didn't have their own stores. And forget LV and Dior and these guys in Chanel, they had stores. I'm talking like every brand has a store. Everybody. There's meat packing. There was no meat packing back then. There was no, there was none of this. There was, there was no direct to consumer. There wasn't the Internet with pricing transparency. There wasn't, there was lots of vendor allowance and markdown money and advertising co op and everybody participated. And the financial model was very different between department store and vendor where in fact the department store was a strong player. Like you said, there was a reason, a different reason for brands to do business with department stores. And 30 day payments made sense 25, 30 years later, as all these things are different, guess what's still intact. The only thing that hadn't changed in my 30 year career in luxury were payment terms. And people are, and I'm, you know, I'm pretty, I read all the comments and you know, oh, you know, if I buy something from Sachs, can I pay for it in 90 days? See here's the trick. There's a whole supply chain that happens. The brands have to design the product, make the fabric commitments, buy the buttons, buy the hardware, manufacture the goods, pay the factories, bring in the goods. Everybody in the supply chain is out money a little bit in advance except for one party, the consumer. They give you the money, they walk out with their product. And as the supply chain got faster, as Internet came up, as there was a lot more competition, as there was a lot less time, as pricing transparency became more prevalent, all these things moving. Not only are the department stores always selling things, if you turn one and a half times a season or even twice a season in luxury, you're not, you're not fast fashion, you're not turning nine times, you're not, you know, sheen, so you're already selling things slower. Guess what? Now you're maybe not selling them at all, maybe you're selling them at a lower margin, maybe you're selling them at below cost. It doesn't matter. You're taking so much more risk. And you're out the cash from 30 days from delivery. And on average, if you sell it 60, 80, 90 days from delivery, you're probably not selling it again. You bought it for 500 bucks. You could be selling it for 350. Forget the thousand it's retailed for. So the margin profile changed. The vendor allowance slowed down. Every brand started building stores. We had to change this dynamic. Do I expect the brand partners to finance my business? No, I don't. It's not their job, but I can't finance theirs either. We have to be partners, and I think this is a movement more towards that. And by and large, our brand partners understood that. They might not have loved how it was communicated. It wasn't great. Again, it could have been different timing, but I think by and large, there's an understanding around that.

[Lauren Sherman]

Well, the one thing that I heard immediately was LVMH got preferential deals. Kering got preferential deals. Chanel, I mean, Chanel doesn't wholesale with you, so I don't know how that would be a preferential deal. Yeah, well, LVMH does, though. Yes.

[Mark Metric]

Just a little bit.

[Lauren Sherman]

Yep. So did. Did you end up having to do a bunch of side deals with companies?

[Mark Metric]

We, you know, look, I think I was on the phone with a big brand partner of ours who said, I heard you gave Chanel. And this is a guy who knows the game and who's been in it longer than me and who's a lot smarter than I am. And he says to me, I know, I'm talking to these European conglomerates. I'm hearing you're giving deals. And I said, hey, Blank, you know what? I have news for you. Chanel's got a better deal than you. You know, I'm sorry. And I'm not going to lie to people. Did we make side deals? I'm not going to call them side deals. Just like people had different deals. It was amazing. When we put Neimans and sex together, do you think all the deals were the same? Lauren? Do you think that when I looked, when I opened up those vendor deals and when I looked at the terms that different people had, that they were all identical? No, but payment terms are one thing. I don't have to take any markdowns on Chanel. I don't have to, you know, I don't pay sales commission on Chanel. I don't have to spend too much money marketing Chanel. I don't have to introduce the Chanel brand to people. There's a lot of different.

[Lauren Sherman]

Some people still think Coco Chanel is alive.

[Mark Metric]

I know Coco Chanel ate chicken wings at the downtown Dallas store, but that's a story for a different time. Yeah. Well, actually, anyway, yeah, we'll come back on Dallas, but I, you know, I think. Yes. Did we make side deals? Yes. Am I willing to talk to any single brand partner? Because look, there are new and emerging brands who can't sustain this type of, of, of payment cycle. I'll work with them. This is not about, I'm not, I don't. I know my place in this ecosystem and I know my place in this community. And all we did this for. If you think about the strategy, it's to be there for our partners. And it didn't come across that way. But it at 30 day terms the last year and a half, it wasn't coming across that way either. And this way I could say, this is what I can do. This is how I can take it. And if you have an emerging brand, if you have somebody who needs support or help or whatever, we got to work on that and we got to work with them on what's best for them. Got it.

[Nicole Carroll]

Each spring, 23 Pulitzer Prizes are awarded for distinguished journalism, books, drama and music.

[Lauren Sherman]

There was disbelief and pride and life changing.

[Nicole Carroll]

My name is Nicole Carroll and I'm a member of the Pulitzer board and host of Pulitzer on the Road, the official podcast of the Pulitzer Prizes. In each episode, winners reveal how much labor and risk, heart and imagination go into creating their prize winning work. We'll talk with novelists and reporters.

[Mark Metric]

We found stuff that no one had.

[Alex Asulin]

Heard before or found out it was.

[Nicole Carroll]

Exciting critics and playwrights. I do not want to live in a world where we don't go on a stage and tell the truth about who we are. And columnists who've risked their lives to speak truth to power.

[Mark Metric]

What moral right would I have to call on my fellow Russian citizens to stand up to the Putin dictatorship if I didn't do it myself?

[Nicole Carroll]

The second season of Pulitzer on the Road premiered March 10. Follow and listen on Apple Podcasts, the Odyssey app, Spotify or wherever you get your podcast.

[Unknown]

As a parent, you want to give your child every opportunity to succeed. But let's be honest. Sometimes homework questions leave us stumped or we wish they had it a bit more challenging when they're ahead in class. That's where IXL learning can help. IXL is an online learning program that supports kids from Pre K to 12th grade in math, language arts, science and social studies. It's designed to help kids truly master topics while keeping learning fun and engaging. Whether your child is catching up, staying on track, or aiming to get ahead, IXL offers personalized learning to meet their needs. Plus, it saves you time and money. No more searching for multiple tutors or programs. IXL is like having everything you need in one place. The best part? It's backed by research. Kids using IXL consistently score higher on tests, and it works for all kids, no matter their greater learning style. IXL is used in 96 of the top 100 school districts in the U.S. so you know it's the real deal. Make an impact on your child's learning. Get IXL now and listeners of this podcast can get an exclusive 20% off IXL membership when they sign up today at ixlearning.com Visit ixllearning.com audio to get the most effective learning program out there at the best price.

[Lauren Sherman]

Speaking of Dallas, so the the thing that happened in Dallas where the downtown Dallas store, the lease was up. The people who own the lease I don't want to get into it. Everyone can google it. It's on every CNBC page and in existence. But the bigger thing was you announced you're going to close the downtown Dallas store, which was very historic. The reality of the matter. When I looked at it and also saw how Neiman Marcus had been managing Dallas, it made sense to me that you would close the store, lease or not. But it brought up to me a bigger question. So the first part of this is what happened and you were able I know it's going to be open for a while, so I don't know if there's anything you can say right now on the status of it. But what happened? And then b what is the sort of plan for the store fleet? Because as you've said, the overlap even between Sachs and Neiman Marcus in many markets is not that high of consumer. So there is an argument to keep both stores. But my instinct was always that if there was a market where you had both or there are some malls where you have both, if the customer overlap is too high, why not invest in one store and invest in making that store the best store? You know, that sort of thing. So the question is one can you just explain from your side what happened with Dallas and to what is the bigger plan for the store fleet?

[Mark Metric]

Sure. Like, you know, as you mentioned Dallas, the downtown Dallas flagship for Newman's, we own the building. Actually it's a couple of subparcels. You need a real estate license to, to really care that much about the details. But there are six sub parcels underneath in which one of them is controlled and without them you really can't operate the store right, because you need, people need to be able to step on the ground and use the escalator or whatever. So the landlord that owned a couple thousand square feet of the land lease had a 99 year or whatever lease it was and legacy management let it go. And when we took the company at the end of December of 24, we were told, here's the new deal and if you don't like it, tough. Well, we didn't like it. And again, I won't be very transparent. This is not a very well performing store. There's no sacks in the market. So this has nothing to do with your other question. This is just as a powerful north park center and this is a store that was in, in a capital deficit and would have needed a lot of investment. And you know, we hadn't made a decision on it, but our hand was forced. And it's like, okay, well if it's, if, if this is the way it's going to go, then this is what we'll do. And if we were a smaller company, everything that played out after that moment, no one would have known. But since everyone was paying so much attention to Sachs and what was going on, it was out there. But really simply what happened was we said, okay, we'll close. And the city of Dallas jumped in and the community got behind it. The landlord worked with the city and then the city worked with us. And look, we still have to reimagine that store. There's not a place there for just Animan Marcus. There needs to be, it's an even Marcus, but it needs to be reimagined. I'm going to keep the store open through the holidays as we work with the city on trying to develop something interesting and different to bring the community back down there and together. I will tell you the overwhelming support that the community has for that store. It's an important part of the legacy of Neiman's. And by the way, that Dallas store I think is really where luxury came into the United States. I mean that was like it not just for Neiman's, not just for Dallas. That was it for all of us. And I understand the importance of it. It's just a matter of redefining and reshaping what it is. And what you guys all got to see was it happening and playing out in the public sphere, which was unfortunate. And then Your folks that you deal with, Lauren, here on our side are communications people. We have to keep saying, we're going to close this door, we're going to close this door, we're going to close the store. Because we didn't want to create a narrative within the organization. We had people's jobs, we had people that worked there. We couldn't lead them on. And when we had a solution, announced it.

[Lauren Sherman]

So that brings us to this bigger store question, though, because you could argue if you're a cold and callous person like I am, that that store should not be open. I'm sorry that it's. Yes, I understand. But like, it's not as you're, you're right in that north park is a powerhouse and that's where people go shopping. And so more broadly, how are you thinking about the store fleet and how to manage it now that you are one company?

[Mark Metric]

Yeah, I think. And we were, we were, we did a lot of work on this during the diligence. And I don't think there's, you know, we want to grow this business and you don't grow by shrinking the store base. To your point, if there's clear overlap and there are easy places where you can, you don't need both, or one is severely deficient to the other, or one is under. You can appreciate this, Lauren, as can your listeners. The store matrix and the assortment in the store makes a big difference. You know, if you have a, you know, a C or D store, you know, that could be, you know, why burn the calories on it. But there's not many of those. And the ones that everyone's really interested in, whether it's the ones in Bell harbor or Boca Raton, Florida or Beverly Hills, these are powerful, powerful stores that do a lot of volume and make a lot of money. And it is not a math exercise. Close one and just move all the volume. You saw that when Barney's closed. You know, Barney's closed in New York City. It's not like Sachs and Bergdorf picked up all that volume. It like went poof into the night. Some to the brands, some to Gone, some to Essence and, and matches, whatever. So if you are holding that, you have to be very careful. And these are well appointed, well invested stores and we just don't see a reason to disrupt something that's working quite well.

[Lauren Sherman]

Okay, so I'll be tracking your store count.

[Mark Metric]

Let me just. And this is a conversation, not an interview. We will again, there will be opportunistic. We're going to take A look and there's going to be a rationalization. It's just going to be small, not going to be what I think you and others might expect and even some would hope. But there'll be closures over the next five or six years.

[Lauren Sherman]

So that kind of brings me to the HBC issues that have happened while all this stuff is happening to you where there are going to be a lot of closures in Canada of stores they had to liquidate all but six of their stores. One of the Saks stores that's there, it's a different company and maybe you have a very clear way of explaining this. I've tried but it's a different company. But they were operating some sack stores in Canada. The company filed for some sort of thing that is not the same name as Chapter 7 or Chapter 11 but they. They were not. They had to liquidate. So Hudson's Bay company is in Canada, the own. Pretty much the only. I mean Holt Renfrew. Yes, but really the department store of Canada. It's like all of our department stores in one. It's really important to people. People are very emotional about it starts a couple of weeks ago. There are all these headlines that they're going to have to liquidate. People associate HBC with Saks Global because Richard Baker is connected to both companies and at one point I don't know how but you were all connected or parts of Saks was connected to HBC and Saks Global spun off but they were the same company at one point. So how have you managed communicating that when you're dealing with all this other stuff? We've only gone through half the list of stuff you've been dealing with. So how did you deal? What is your sort of line about what that means and how. Because I think what it did was also got people more nervous about Saks Global because they still associate it with hpc.

[Mark Metric]

Yeah, I think they should be less concerned about Sachs Global. Again. I think a lot of the pressure that Sachs was under in 2023 was a result of its cross relationship with Hudson's Bay and the fact that we separated Hudson's Bay when we formed Sachs Global from a capital structure standpoint, a positive. If you're looking at our business from that standpoint. When you think about what I'm telling people or what's my line? Look, the first thing I'd say is, you know, I know a lot of the people that worked or work at Hudson's Bay and I feel for them and I really do. I mean these are great people that work really hard. And it's, it's an unbelievably phenomenal brand. I mean, they study this brand and elementary school in Canada, you know, it's a big deal, and I get that. So it's, it's, it's tough to see this. And, and I feel for them. That said, we're two separate companies. It has actually not been something that's been confusing. People seem to get that, and we haven't had to deal with much of. Of that. And, you know, we're watching it sort of like you are. I'm not very close to what's happening up there. It is two ownership groups, two separate credit facilities. So where I'm not even, you know, necessarily not getting any updates or hearing much of what's going on. And, you know, again, aside from the just human aspect of it not being a good thing.

[Lauren Sherman]

Okay, two more bits and then let's talk big picture. And future layoffs seems pretty standard. You're going to have layoffs as the business integrates, I assume.

[Mark Metric]

Yeah, I mean, it's. Look, it's not the story of this. You know, everyone has to remember the plot, and it's why I sent that memo out. I know you, you said it was so I can, I can make right with my people, but really, it's, it's really about. We're trying to create something great here. And we're trying to create this personalized, very tight relationship with the consumer type of business where we're sticky. We're sort of always with you. We know you well. You trust us. We've always got what you want or a destination. And then for our brand partners also, we want to be reliable. We want to be a strong counterparty. We want to be someone that can help them grow, which, again, is not something. And we can call it like it is. That's not something that Saks was for the last 18 months. Now, I've been at the company 30 years, running it for a decade. But you're graded like you said, Lauren. You know, have the last 18 months gone, so we got to work on those things. A derivative or a byproduct of this combination is going to be redundancy. Like you said, There were two CEOs. I lost and Jeff Wah won, and here I am. But there's going to be redundancy across the organization. The management of that is. Listen, the goal for us is we've got to do this properly and deliberately. We've got to have the right talent at the Same time, we've got to treat these people the right way. These are hardworking people that have all been in one of these two companies, you know, one year, five years, 10 years, 20 years, it doesn't matter. And you have to understand that, you know, you have to do it right and you have to treat them right. And it's just taking time to do that. So there will be reductions and it's going to be a multi year transformation. But these are, you know, it's interesting if you go back, Lauren, and look at what you've been writing about the last six or seven years, what's happening at all these other retailers all the time is changes in the headcount transformations. This is not very different. It's just a lot more deliberate. And again, there's a really, really big pivot and transformation at the end of this that makes it worth the effort and the time that we're all putting into it.

[Lauren Sherman]

Yeah, we're going to talk about that in one second. The two more things I wanted to discuss with you are customer refunds. So this is a win for you. I think one of the other narratives that was happening as the deal was closing was that customers were complaining online on social media that they were not, they were having to wait a long time to get their refund if they return something online. I know we discussed the return fraud issues, but generally it was, it was frustrating. It sounds like from what I've heard, that you've gotten that back under control and that customers are now receiving refunds in a normal like five to seven day thing. Can you speak to a normal five to seven day cycle? Can you speak to a bit very shortly about how you got it back on track?

[Mark Metric]

Yeah, the issue has been resolved. And again, we were doing it, it was an online fraud issue and it was a lot of different reasons, but we had to end up hand checking, you know, almost everything that came back. You know, you get back empty boxes, boxes with rocks in it, boxes with goods that are, you know, counterfeit, whatever. So you have to make sure that actually you're controlling all that, not just from your own standpoint, but from the customer experience. We're automated, so if somebody sends us a box of rocks and we put that box of rocks back into the, into the bin where the perfume is, we will send somebody else that box of rocks if they order it. But we used what we're using. We used data, whether it's AI, generatively or ML, to understand customers, to be able to sift through, to be able to Know who's an actor, who's a potential bad actor. And really it's a very, very small percentage. And so we were able to just go sort of return back to moving a lot faster. Do I look at it as a win? Not necessarily. But we got it back to where it should be and it was unfortunate that it was there.

[Lauren Sherman]

Well, you have to, I'm sure you understand that like as all these vendors were not getting paid or having back pay, then suddenly customers were also experiencing that it felt like it could be related the two things.

[Mark Metric]

Well, we're back now again, issue resolved on the returns and understand how it could look and feel. And the, you know, I don't, I'm not going to give you the specifics but the amount of the customer refunds are not, they're not very mature. You know, in the grand scheme of things, it's not something that was going to make a difference.

[Lauren Sherman]

So we've gone through every issue I could think of and now we have the big macro issues. So you're, it sounds like most of your brand partner relationships are being, are on the right track and you're, you're shipping goods. I'm, I get tips. You're. They're not shipping to you. Then I see the stuff in store and, and online. So every, it seems like all that stuff you're moving towards the right direction, inventory is towards the right direction. And now you're faced with tariffs potentially whatever that does not, maybe not to the pricing itself even for a while, but to consumer behavior. There are people saying we're already in a recession. As you continue on this path of making this one business which is going to take a lot long, lot more time and effort and work. How are you dealing with these big issues that are sort of facing the consumer right now?

[Mark Metric]

Yeah, I think again, I like to consider myself pretty battle tested. I think in the 30 years I think about where I was positioned in the company right after 9 11. Where I was positioned in the company during the Great Recession in 08. I was a chief strategy officer. I was ahead of merchandise planning after 911 and of course I was CEO during the pandemic. And there were so many things in between. Whether it was the bubble burst in 2000, the presidential election that nobody won in 2000 and then there was a bunch of other really recessionary moments and then there was some great times that no one ever believed. Our business is filled with insecure, paranoid people. Right. So, oh, it's all stimulus money. It's never good. It's Never good, Lawrence either. Things are too good. It must be the stimulus. Things are bad. Here's, here's how I. The one lesson I've learned is luxury is a long game. And the strategies that we have in place, what we're trying to do, which is again, make this the most unbelievable experience for the customer, okay? Really, really deliver on that. That's. By the time we're ready to your point, by the time we're done, it won't be tariffs, it'll be something else. It might be killer bees, it might be, you know, the title shifts. I have no idea what's going to be happening two years from now or three years from now. But right now, let's just answer the question that needs to be answered. You said it well, right? What things are going to cost. That's challenge number one. But that's not even the greatest challenge. You know, people like, you know, I like to myth bust here. People think that wealthy customers don't care what things cost. I mean, that's crazy. We serve the entire continuum of luxury consumers at Sachs, right? Everyone from the most core that spend, that walk their dog in Brunello, Cinelli, all the way to the person who's buying one pair of Gucci shoes or Chanel shoes that they saved up for all year. That entire continuum, not one person in that continuum says, oh, I don't care when prices go up. Of course they do. And that's why we have loyalty programs. It's why we always manage our alterations. It's why people like value. But I think the bigger concern for us is going to be the uncertainty of where the consumer is. I mean, the markets are up and down. People are worried about the economy writ large. Like you said, recession. You look at savings rates in the country right now, they are below pen pre pandemic levels, but only slightly. And I need people like me in my business. Right? You have 40% of my business is done by 2% of my customers. Okay? Those people don't worry about savings rates if you ask them by and large again, they don't want to pay $10 more for something they don't. They're smart and sophisticated shoppers, but they also don't know what a dozen x costs right now. So I'm not going to hide behind that. But they need to have, they need to have certainty around what's going on. They need to feel right and be in the right mood. So you put them in one bucket, the other two, the other sort of 98% of our customers that do 60% of our business. You have to worry about things like job security, you have to worry about things like, you know, how it's going to work and, and if everything else in my Life, if my iPhone 17, which is going to come out in September, is going to be $2,300, that might affect what I spend at Sachs or Neiman's. So what I'm expecting right now is going to be a little bit of a turbulent next few months just as we bop around. And then one of two things will happen. Either things will calm down in the back half or people will just get used to the bobbing and weaving and the turbulence and we'll see a little bit more of a leveling off in the back half. That's how we're sort of looking at it. All that mind, we got to keep an eye on the purchase levels, what kind of sales expectations we have, and we have to be very careful and deliberate with our, with our working capital. But you know, I'm worth looking at prices because you'll ask me next, you know, probably in that, you know, 8 to 12% increase, which is, by the way, you know, this sort of in line with what luxury has been moving every year for the last bunch of years. Again, it's great. Customers don't love it, they've been pushing back on it, but it's not going to be something aberrational.

[Lauren Sherman]

How much of that? And then I have one more question for you. How much of that increase? Like, I guess you're in a good, in a good spot in a sense because you're not the one who has to deal with the pricing part of it. Like you, your prices sort of make themselves because of the way your model works, but you're not buying raw materials, you're not doing all of that stuff. You don't have to deal with like exporting from one country to another, importing stuff here. Like, I mean, you do, but not as. So is some of this for you? Like, how do you plan for that? Like, that's, I mean, I don't know how anyone can. But, but for a company that's not, I mean, I guess you're making private label stuff, but still there's no.

[Mark Metric]

This is to your point. You know, we, there'll be suggested retails, they'll be. And, and we're gonna, you know, we're gonna have to see how people handle what the cost increases are. But don't think it's not going to be of consequence to us again if things Become too expensive. Customers ultimately want them, but they'll want to pay less. And they eventually, if they wait it out, they will. And they're going to pay us less. They're not going to pay the person we bought it from less. So, you know, I'm forecasting it again. I think we're going to. There's a little bit of turbulence ahead and we're not. There's no panic right now. I mean, I compare this to other moments and, you know, this is just one where the, the worst thing you can do is overreact one way or the other, you know, so, you know, slow and steady.

[Lauren Sherman]

Okay, final question. It's December 2025. You've been paying. You've been, by all accounts, you've been paying the back payment because there's no way you're not going to pay that, right? There's no way. So you're. So you're paying it.

[Mark Metric]

No problem.

[Lauren Sherman]

What does the new Sax Global look like in December? Because that's not that far from now. So you don't have to have all the answers. But where, what is the path that you want to be on by the end of the year?

[Mark Metric]

Yeah, I think. And it's scary, but like, yes, the fact that we're paying, that's like, so now what do I do with all my time? But no, I think you can really start. The customer's really going to start to see the benefits of this combination. I think the hyper personalization efforts that are ongoing and that we started at Saks are going to be much more informed by the data. So the marketing you see from us, the personalization on the Saks website that you'll see from us, everything will be much more dialed up. You're going to have. We're already piloting inventory being shared across the platforms. So as a customer, again, you're going to see that benefit. And you know, we're going to start testing and learning about things like loyalty and other benefits for customers across the platforms. So I think you're going to start to see the beginnings of what we're trying to do here, Lauren, which again is transform this thing, transform it into something new. And by December, which is not long from now, I do believe people are going to start to see it crystallize. And you know, I think people are going to start to get very excited about it.

[Lauren Sherman]

Mark, hopefully next time we chat we can just talk about the customer and what it's like to make a great experience in store and all that stuff. So maybe January 2025.

[Mark Metric]

I. I hope so.

[Lauren Sherman]

Thank you for doing this. I really appreciate it.

[Mark Metric]

No, thanks for having me. And I. I love what you're. What you put out there, even when it's a. About me. Thank you. Thank you.

[Lauren Sherman]

I appreciate you, Mark. Thank you. Fashion People is a presentation of Odyssey in partnership with Puck. This show was produced and edited by Molly Nugent. Special thanks to our executive producers, Puck co founder John Kelly, executive editor Ben Landy, and director of editorial operations, Gabby Grossman. An additional thanks to the team at Odyssey, JD Crowley, Jenna Weiss Berman and Bob Tabador.