As Saks teeters, department stores bet on shopping experiences

From Paris to New York, department stores are sharpening their focus on curated shopping experiences- ice-skating reveals, wine tasting, and architectural tours- to attempt to win again consumers.

The push has gained urgency as Saks Global’s mounting troubles spotlight the sector’s wrestle to remain related amid competitors from luxurious manufacturers’ personal boutiques and fast-growing e-commerce platforms. Analysts say the development is greater than beauty. It displays a structural shift in a sector underneath stress from altering client habits and declining foot site visitors.

“In today’s market conditions, selling luxury goods requires an outstanding experience, which works best in outstanding venues,” mentioned Benjamin Sebban, head of retail funding at Knight Frank in Paris.

Qatar-owned Printemps’ new Manhattan retailer options paper replicas of ⁠French landmarks- a reminder of its Parisian heritage- and hosts unique launches and wine tasting.

“This is more than a place to shop- it’s a space to live, linger, and immerse yourself in a new kind of luxury lifestyle,” Printemps America CEO Thierry ⁠Prevost advised Reuters, highlighting the shop’s positive eating restaurant, champagne bar and talks with designers.

In Paris, Galeries Lafayette spent greater than 100 million euros ($117 million) restoring its stained-glass cupola, crediting the revamp with lifting visits above pre-pandemic ranges. The push aligns with analysis from consultancy Bain that discovered experiential sectors like hospitality and positive eating drove luxurious market development between 2023 and 2025.

Success is not assured, nonetheless. LVMH poured round ‍750 million euros ‌into refurbishing the artwork nouveau constructing of its La Samaritaine department retailer dealing with Paris’ Rue de Rivoli. But the shop nonetheless struggled after its ⁠2021 reopening as compared with LVMH’s Le Bon Marche Paris ‌retailer, and the pair have been mixed in a restructuring final yr.

Analysts say department stores are betting that curated occasions and architectural upgrades ‌can revive their relevance amid more durable buying and selling.

Saks Global, whose bonds are publicly traded, reported a 13% year-on-year drop in second-quarter income to $1.6 billion in October and an adjusted core lack of $77 million. CEO Marc Metrick stepped down after the corporate missed a bond fee, triggering experiences it was making ready for chapter.

While analysts cite stock missteps and acquisition-related debt as key components, they are saying Saks’ plight displays a deeper structural squeeze: department stores ‍are shedding floor to mass-market chains providing worth and luxurious manufacturers’ personal boutiques promising exclusivity. “What you’re seeing with Saks is a symptom of a much larger problem,” mentioned UBS analyst Jay Sole.

Bernstein analysts say US department stores ought to transfer towards concession-heavy models- offering multi-brand gross sales employees whereas letting manufacturers handle ‌operations and stock. Milan’s Galleria Vittorio Emanuele II ⁠gives ​a template: town leases prime retailer areas by means of a bidding course of, and says values have quadrupled in a ⁠decade.

“Multi-brand retailers need to ​reinvent themselves and go back to their scouting and discovery mission,” mentioned Bernstein analyst Luca Solca.

Some stores are experimenting with partnerships. In November, Parisian retailer BHV hosted the primary bodily outlet for Chinese price range model Shein, though the transfer drew criticism from some opponents and shoppers.

“The right answer would be for department stores ​to build out their own online offering, with their own identity,” Knight Frank’s Sebban mentioned.

Global department retailer gross sales are projected to have declined by 4% to six% in 2025 and to point out little restoration by means of 2030, Bain forecast in November, ⁠lagging development estimates for the posh sector general. US retailer Macy’s warned in December of ⁠weaker-than-expected holiday-quarter earnings as a consequence of cutbacks in discretionary spending. London’s Harrods in October reported a 17% decline in underlying working revenue for 2024.

By distinction, e-commerce gamers are thriving. MyTheresa, owned by LuxExperience, greater than doubled quarterly core earnings in November, providing comparable merchandise to Saks however with perks like free transport for orders over $400.