The JCPenney Turnaround Is Helping Luxury Brands Like Saks

Saks, Fifth Avenue, New York City, FashionA customer peers into a Saks Fifth Avenue window in New York City

Photo: Mark Lennihan / AP

The luxury market has been steadily making headway in the past few months.In a UBS note today, analysts said that premium retailers like Saks have a promising outlook for 2012, as the “expanding economy creates new aspirational customers” and that the “SKS premium positioning protects it from the mid-tier share battle caused by JCP’s turnaround strategy.”

But interestingly, UBS says that the key to higher margins for Saks is focusing on ecommerce and its discounted Off Fifth brand, which account for 40 per cent of revenues combined.

This will makes things more difficult for JC Penney, which is trying to sex up its image and compete against a broader range of retailers — and not just in the discount arena.

Now read about why ‘Judgment Day’ Is Rapidly Approaching For JCPenney >

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