Saks Fifth Avenue abruptly announced the closing of its Owings Mills store yesterday, leaving Baltimore with just one upscale department store -- Nordstrom -- stunning the retail community and raising questions about the direction of local shopping.
"It's obviously not a positive sign for the Baltimore marketplace, and I think it speaks to the difficulty that [the area] has in supporting retailers that offer strictly upper-end merchandise," said David H. Nevins, president of Nevins & Associations, a Baltimore marketing firm and retail consultant.
Without warning, the 90,000-square-foot store in Owings Mills Mall closed yesterday to take inventory and inform its 135 employees that they will be laid off. The store, which opened with great fanfare on Aug. 15, 1986, will reopen today and begin a liquidation sale on Nov. 9 that will run through Saks' closing on Jan. 6.
Already, there is speculation from industry analysts that a J. C. Penney store could replace Saks, complementing the mall's other anchors, Macy's and Hecht's.
But officials of Rouse Co., the Columbia-based real estate concern that owns the Owings Mills Mall, said they hadn't even heard about Saks' plans before yesterday's announcement.
"I don't know anything about it," said Rouse spokeswoman Cathy Lickteig. "All we know is they closed for inventory."
For years, speculation swirled over a possible Saks closing, but the privately held company with 46 stores across the country maintained all along that there were no plans to pull the plug in Baltimore despite visible signs that the upscale retailer wasn't drawing customers.
But all of that changed yesterday.
"The decision to close the store is to focus strategy on growth markets," said a company spokeswoman in New York who characterized the Owings Mills store as "underperforming" with "below-average results."
The decision does not mean that Saks is scaling back its operations. Although the company has no immediate expansion plans here, it expects to open stores next year in Greenwich, Conn., and Charleston, S.C. -- communities that may make a better fit with Saks.
The downfall of Saks in Owings Mills, analysts say, was due in part to the clash of cultures with Baltimore's blue-collar tradition. But even more, they said, Saks failed here because of its limited merchandise, higher prices and the effect of Baltimore's weakening retail environment.
Retailers have increasingly gone the way of warehouse-style retailing with discount giants Wal-Mart and Target leading the charge, leaving in their wake old-line department stores. Among the latest casualties: Woodward & Lothrop department stores, the 115-year-old retailer based in Alexandria, Va., that is in the last five days of a liquidation sale at sites throughout the region, including Columbia, White Marsh and Annapolis.
But Saks faced another threat: the September 1992 opening of Nordstrom in Towson Town Center, about 20 minutes away. Apparently, there wasn't enough room for both stores.
"To see a store like Saks leave our community is, I feel, tragic," said Tonya Young, Nordstrom's general manager in Towson. "We like the competition."
Saks' pullout stunned industry observers, consumers and employees alike -- if only because the retailer had just made a major commitment to the area when it recently chose the Hickory Ridge Industrial Park near Aberdeen as the site for a 468,000-square-foot processing and distribution center.
"Holy Samoly," real estate broker Rene Daniel said when informed of the news. "I didn't think they'd close because I thought they were doing sufficient business."
Employees didn't see it coming, either.
"Some were very upset," Evelyn Jacobson, a sales associate in intimate apparel, said of her fellow Saks employees. Company officials explained severance packages and offered to help employees find new jobs. "They are trying to be as fair as they can with us," she said.
Shoppers were just as surprised yesterday when they found the doors to Saks locked.
"I think it's terrible," said Marlene Rosoff, a 28-year-old who said she shopped for fragrances and clothing at Saks. "I think that store gave the mall a little class and prestige."
But Owings Mills Mall manager John A. Johnson said that what happened to Saks is just mall business in the 1990s.