What: In his quarterly letter to vendors, Saks’ CEO shared that luxury customers are becoming more deliberate and value-focused in their spending.

Why it is important: Due to the current macroeconomic environment in the States, luxury retailers are having to adapt to luxury consumers’ changing behaviors.

Consumers are shifting their discretionary spending more towards work clothes and fashion for dining out and parties and pulling back spending on casual clothes, sneakers, and handbags.

Saks, its e-commerce operation, saw an 8% decrease in gross merchandise value in the first quarter while Saks Fifth Avenue saw GMV fall 15%. For the entire Saks ecosystem, GMV fell 13% in the first quarter but was up 22% on a two-year stack and 31% compared to pre-pandemic levels.

Despite the expectation of consumer spending staying soft throughout the remainder of the year, the CEO is confident that Saks can weather the challenging macroeconomy. The company will continue on a path toward a lot more scale and efficiencies.

Saks CEO to vendors: luxury sales stay soft