Amid the volatile macroeconomic environment, luxury customers have gotten more “deliberate and value-focused” of their spending.

They’re also shifting discretionary dollars more toward wear-to-work clothes and fashion for dining out and parties, and pulling back spending on casual clothes, sneakers and purses.

That’s the read on the luxurious consumer from Marc Metric, chief executive officer of Saks, who on Wednesday issued his quarterly letter to vendors updating the business.

He said that Saks, the e-commerce operation of the Saks Fifth Avenue brand, saw an 8 percent slide in gross merchandise value in the primary quarter ending April 29, though on a two-year stack, first quarter GMV was up 64 percent. (GMV refers to all of the merchandise sold including owned goods, and people sold through leased shops, marketplace formats and drop shipping.)

At SFA, the corporate operating the Saks Fifth Avenue stores, GMV fell 15 percent in the primary quarter, though Metrick indicated that GMV on the stores grew 23 percent in comparison with Q1 2021. On a two-year stack, GMV for the SFA stores rose 8 percent, while profitability increased 20 percent, Metrick wrote.

GMV for the complete Saks ecosystem – stores and e-commerce – fell 13 percent in the primary quarter, but was up 22 percent on a two-year stack, and 31 percent in comparison with pre-pandemic levels in Q1 2019.

Saks and SFA Stores, that are two separate firms, don’t publicly disclose dollar figures, just percentage change.

“What we would like to emphasise is our two-year growth so people don’t think there’s a large retreat” from luxury spending, Metrick told WWD. This 12 months, “It’s a rebalancing of where persons are spending their money,” Metrick observed.

The CEO also emphasized his company is agile and may weather the difficult macroeconomy. “We now have a reasonably good ability to navigate these environments. We’ve been through Sept. 11, the Great Recession and the pandemic…We’re staying near the shopper on our strategy.”

He said the corporate continues “on a path towards so much more scale and efficiencies. We rationalized the worker base. There’s more efficiency coming out of our marketing spend, with less spending on [customer] acquisition and more on retention.” About 100 layoffs at Saks.com were reported last January.

Last 12 months, “We were rather more in a buildup mode” with the launch of two recent achievement centers, Metrick said. This 12 months, the corporate should begin seeing the fruits of those investments, he contended.

Metrick expects consumer spending to stay soft through the remaining of the fiscal 12 months. “The posh consumer still has an appetite for luxury, but their spending is becoming more deliberate and value-focused,” he wrote.

Last quarter, “One of the best-performing business on the web site was women’s apparel. We’re seeing folks dress up again,” Metrick said within the interview. While wear-to-work clothes and fashions for going out for dinner and parties are selling, sales of casual clothes, bags and sneakers are beginning to “recede a bit,” he said.

Traffic on the Saks.com site grew by 6 percent last quarter. “By design, recent customer counts are down 25 percent in comparison with Q1 2022, as we emphasize retaining customers at the next rate, especially those with lifetime value. Total customers decreased by 6 percent for the quarter, yet are nearly 50 percent higher than once we launched Saks as a luxury e-commerce platform in March 2021,” Metrick wrote.

On the brick and mortar front, Saks Fifth Avenue has invested $52 million to open a 135,000-square-foot store on Wilshire Boulevard in Beverly Hills, on the location of a former Barneys store, in the primary of week of October this 12 months. The smaller Saks store being vacated on Wilshire can be redeveloped by the parent HBC. Recently, HBC raised $180 million in incremental liquidity to speculate in stores.

As reported last week by WWD, essentially the most recent Saks Luxury Pulse survey revealed a “deceleration” of luxury spending. Fifty-three percent of those surveyed said they might spend the identical or more on luxury goods in the following three months, meaning that 47 percent of the luxurious customers surveyed would spend less. Within the prior Saks survey fielded last January, 62 percent said they might spend the identical or more on luxury goods over a three-month period, meaning 38 percent would spend less. Saks’ Luxury Pulse is a quarterly online survey of luxury consumers’ attitudes toward shopping, spending and fashion trends. It relies on responses from 3,744 U.S.-based respondents over age 18 and was most recently fielded between April 28 and May 1.

Other strategies being advanced at Saks include personalization, AI, the Saks Live interactive live commerce platform, and the Fifth Avenue Club for private shopping which is opening suites in resorts.