Saks Fifth Avenue, the US luxury department store chain, is offering established customers who spend more than $2,000 in a single shopping trip access to 12 months of interest-free credit, in a sign of the pressures facing the luxury US sector.
The retailer has previously used interest-free credit offers to support jewellery sales, although the deals are more broadly associated with retailers of big-ticket home appliances rather than Bottega Veneta handbags and Oscar de la Renta evening gowns.
Saks Gift of Time promotion was launched last week and runs until December 11. It is open only to holders of the retailer’s own-brand charge card, provided they meet credit criteria.
Some 44 per cent of Saks’ sales in its last fiscal year were charged to its proprietary credit-card holders, who are the target of the offer, underlining the importance to the retailer of this core customer group.
Saks, at which total sales fell more than 18 per cent in October to $269m, is also trying to drive purchases by its SaksFirst loyalty club members. This weekend it was offering triple reward points on purchases that can be converted into store gift cards and other offers.
Saks’ upmarket rival Neiman Marcus is stepping up promotional sales after its store takings fell more than 25 per cent to $286m in October.
Other more modest US retailers are also boosting offers to their most loyal customers, as they face what is expected to be a brutally competitive festive shopping season.
Kohl’s, the low-cost department store, has said it will offer holders of its charge card two extra days of discounted shopping in November and December.
Kevin Mansell, Kohl’s chief executive, said last week that charge-card holders were “really, really important” to the retailer, because of their greater loyalty to the store. He also said there were signs that, in the current tough environment, its card holders were concentrating more of their spending around Kohl’s regular monthly discounted shopping events.
“I think they’re finding the extra percentage off better value than collecting bonus points for airline miles or things like that,” he said.
Amazon, the online retailer, which first launched interest-free offers on electronics two years ago, is now offering 90 days of free credit on any item costing more than $119, and up to 24 months’ interest free on more expensive items, such as flat-screen televisions costing more than $1,000.
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