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NEW YORK CITY-Saks Inc. posted a net loss of $98.8 million for the fourth quarter and a net loss of $154.9 million for fiscal 2008, both of which ended Jan. 31, the locally based high end retailer announced on Wednesday. In a statement, Stephen I. Sadove, chairman and CEO, blames “deteriorating macroeconomic conditions” for the company’s sales results and operating performance. The company had posted positive numbers for the same time periods a year prior.

“It is our expectation that the economic environment will remain extremely challenging through 2009, if not beyond, and we have planned accordingly,” Sadove says in the statement. “We continue to focus on what we can control, and I am pleased with how our organization has risen to the challenge. I am confident we have taken and will continue to take the decisive actions needed in response to the environment and to better position the company for the future when economic conditions improve.”

The company’s comparable store sales declined 15.3% in Q4, compared to a 9%-gain in comp-store sales in the same period a year earlier. Sadove says in a statement that this decline cut across “all geographies, merchandise categories and channels of distribution. Soft performance in the company’s New York City flagship store, which began in the third quarter, persisted into the fourth. Women’s apparel continued to be the most challenging merchandise category.” He adds that while the retailer’s “aggressive” discounting cut into its margins, it also helped produce “meaningful progress” in reducing inventories.

Saks plans between $50 million and $60 million of cost reductions this fiscal year, and has lowered its planned capital expenditures to approximately $60 million, down from the $129 million the company spent in fiscal 2008. The ‘09 capital expenditures primarily will stem from completing the women’s designer floor in the flagship store at 611 Fifth Ave. and renovation projects under way at other locations.

Although Sadove notes that “it remains impossible to predict future sales and gross margin performance with any degree of certainty,” Saks is assuming comp-store declines in the low double-digit range for fiscal ‘09. That translates into a decline of about 20% for the first half of the fiscal year, tapering off to a drop in the mid-to-high single digits for the second half. Saks currently operates 53 Saks Fifth Avenue stores, 51 OFF 5TH stores and the saks.com website.

The company expects gross margin to decrease to the 32% to 34% range in the first half of fiscal ’09 but also projects “substantial year-over-year gross margin recovery” in the second half. In terms of credit, Sadove says, “We are fortunate to have flexibility under our existing debt facilities, with no short-term maturities of senior debt.” At the end of Q4, the company had approximately $10.3 million of cash on hand and $156.7 million of direct outstanding borrowings on its revolving credit facility. Funded debt, including capitalized leases and borrowings on the revolving credit facility, totaled approximately $640 million as of Jan. 31, while debt-to-capitalization was 39.9%.

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