Loss is wider than expected
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Saks Inc. reported a wider-than-expected loss for the third quarter as the company resorted to deep discounts in an attempt to pull in affluent customers spooked by massive job losses on Wall Street and shrinking stock portfolios.
The New York-based operator of Saks Fifth Avenue issued a dour outlook for the holiday season, predicting deteriorating profit margins in the fourth quarter as it sees the need to keep discounting to clear out piles of designer merchandise.
It also plans to cut spring inventory by 15% and reduce its capital expenditures for next year by 40%.
Saks reported a loss of $42.8 million, or 31 cents a share, for the quarter that ended Nov. 1. That compares with a profit of $21.6 million, or 14 cents, a year earlier.
Sales fell 13% to $698 million. Saks shares fell 56 cents, or 14.6%, to $3.29.
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