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Saks offers facial workouts, threaded brows in cosmetics redo

New York

SAKS Fifth Avenue wants to elevate cosmetics shopping to a whole new level. Literally.

The luxury retailer is breaking with decades of tradition by moving its beauty section from street level to the second floor of its flagship store in midtown Manhattan, expanding its size by 40 per cent and offering high-end services such as face workouts and slimming massages.

With 15 treatment cabins and "concierge" service to help customers navigate more than 120 brands, the new floor that opens on Tuesday is the latest attempt by a department store to rekindle interest in brick and mortar in the era of e-commerce.

"The decision to move it upstairs is completely contrary to what is the standard in department stores all around North America," Saks president Marc Metrick said. "It wasn't just space, it was being able to make the experience less frenetic."

The launch is part of a US$250 million renovation at the 94-year-old store on Fifth Avenue, which includes a revamp on the main floor to focus on luxury leather goods and accessories such as scarves and sunglasses, and adding an outlet of the Parisian eatery L'Avenue.

Saks, which runs 42 stores in the US and Canada, has been recovering from slumping sales to become one of the few bright stars in the portfolio of struggling Toronto-based owner Hudson's Bay Co.

Saks' makeover is "bold" because beauty is traditionally on the main floor for a reason: it is a traffic magnet with high productivity, Bloomberg Intelligence senior analyst Poonam Goyal said. For it to work on the second floor, it must become a shopping destination, something that Saks managed before with its shoe department, she said.

That is what the company is aiming for. The 32,000 square foot space paved with Italian tiles is designed to give a serene feel, with windows restored to let in more light and walls kept low to open up the horizon.

Saks said that it will offer more than 85 free services, such as express facials and colour tips. If money is not an issue, you can exercise your facial muscles at UK import FaceGym, get your brows threaded, or indulge in a US$220, 50-minute silhouette-reshaping massage designed by French specialist Martine de Richeville. You can also grab a bouquet on your way out from EB Florals.

Department stores have had a hard time catching up to the likes of Ulta Beauty and LVMH's Sephora, which changed the way that beauty is sold by making it easier to explore and feel beauty products, Ms Goyal said. Macy's is testing new sales formats for cosmetics, while JC Penney has a partnership with Sephora.

Saks is going big on treatments. "One thing that was important to us was to really focus on the experience," chief merchant Tracy Margolies said in the interview. "You could come to Saks, and you could spend the day."

The company is taking elements of design and some treatments to a few other locations, Mr Metrick said. Saks opened three stores last year, and comparable-store sales - a closely watched measure - rose 2.1 per cent in the fourth quarter, the most in three years. The luxury chain accounts for about a quarter of Hudson's Bay's overall sales, according to estimates by Macquarie Capital Markets Canada analyst Chris Li.

"Saks is in a sweet spot right now because it's a luxury brand, it's in the US where the consumer is doing really well and tourism sales are coming back," Ms Goyal said.

Still, Hudson's Bay is being dragged down by online retailer Gilt, its European business and the Lord & Taylor chain. Selling underperforming assets such as Lord & Taylor would be a "positive catalyst", according to Macquarie's Mr Li, who last month cut his stock price target and earnings estimates.

Hudson's Bay's shares have lost 18 per cent this year, and 65 per cent over the past three years. To revive sales and cut costs, the company has overhauled management and brought in a new chief executive officer, centralised e-commerce operations and cut jobs. WP

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