Will gambling on a Saks Fifth Avenue flagship casino pay off?

Discussion
Rendering: Hudson’s Bay Company
Jan 17, 2023

Hudson’s Bay Company has bid for a gaming license to install a high-end casino on the top three floors of the famed Saks Fifth Avenue flagship in Manhattan.

The Saks project would start on the ninth floor and cover 200,000 square feet, incorporating a lobby with a separate red-carpet-lined entrance. The space is currently occupied by a restaurant, a section for discounted merchandise and SaksWorks, its recently-launched coworking venture.

A Saks source told Business Insider the casino addition is expected to “attract visitors and tourists from around the world seeking that luxurious, Manhattan experience.”

The New York Times, which first reported the bid, said the aesthetics of the casino would align with the flagship that first opened in 1924. The Times wrote, “Renderings of the proposed casino show smartly dressed urbanites seated below chandeliers, reminiscent of stylish ’60s spy films, and a moonlit soiree on the roof of the stone-clad, prewar building.”

Will gambling on a Saks Fifth Avenue flagship casino pay off?
Rendering: Hudson’s Bay Company

Saks is among several major companies vying for three available licenses that became available after state legislators first authorized casinos in the city in April 2022 as regulations over online gambling, sports betting and physical casinos continue to loosen across the country. Competitors include major commercial developers and Vegas casino operators, many of which are planning sizable projects for the outer boroughs.

The winners are expected to be announced later this year. The board will consider job creation potential, economic growth and a commitment to collaborate with minority contractors, according to New York Daily News.

Community groups and local politicians have already voiced opposition to opening a casino in Manhattan and plan to fight any proposal. Saks may ultimately face resistance from its well-known neighbor, Saint Patrick’s Cathedral.

Still, the potential tax benefits have some state and city planners focused on opening a casino in Manhattan, and the Saks proposal may benefit by being quicker to build versus other sprawling projects.

New York State Senator Liz Krueger, who has long opposed a Manhattan casino over the risks of lower-income individuals being “victimized,” told the Times earlier this year that she may be open to a casino atop Saks since it will likely cater to the wealthy.

DISCUSSION QUESTIONS: What do you think of the prospects for adding a casino atop Saks Fifth Avenue’s Manhattan flagship? Do you see gambling becoming a favorable component to the retail experience should restrictions further ease?

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"Gambling + Retail = Retailtainment at its finest?!? This seems a bit out of place IMHO."

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32 Comments on "Will gambling on a Saks Fifth Avenue flagship casino pay off?"


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Dave Bruno
BrainTrust

There’s some real potential here, to be sure. I think the secret will be creating the right brand ethos: IMHO they will need to hew much closer to Monaco than Las Vegas.

Liza Amlani
BrainTrust

What he said … It took me a minute to get on board with the idea — my first reaction was SAY WHAT NOW?

BUT if you think of where luxury + hospitality intersect at its finest, it’s definitely the Monaco vibe. And the fact is the casino cities have already proved and reaped the benefits of winners and losers that shop with joy or remorse. Saks could win big with this model. The concept is also more aligned with real estate moguls who run HBC/Saks.

Dave Bruno
BrainTrust

Welcome aboard the Yea Train, Liza! ;^)

Joel Rubinson
BrainTrust

This bold move has some plusses and minuses. It can help to make the store a destination but it can also attract some unsavory types. The casino in Queens that I once performed at had thieves roaming who took $200 from my wife’s wallet and another crew almost stole my harmonicas because they were in a case that looked like something valuable was inside.

Neil Saunders
BrainTrust

A luxury casino that is a destination for those seeking leisure and entertainment could work for Saks in Manhattan — especially as I am sure that the company will manage security and access policy very tightly. In a way, it adds to the theater and spectacle of the department store space. However, this is very much an exception: I don’t think this is viable for many other retailers in most other locations.

Carol Spieckerman
BrainTrust

What will Saks think of next? This is a novel idea that should drive traffic to Saks’s flagship. Going back to a previous RetailWire discussion, gamblers that have enjoyed a few cocktails will likely be more open to making high-ticket purchases downstairs. It’s all upside for Saks.

Ian Percy
BrainTrust

You may be right Carol, and that is certainly the hope. But kind of depends on how much they lost doesn’t it? After my visits to LV, the last thing I want to do is spend more money!

Carol Spieckerman
BrainTrust

Ha! Good point!

John Hyman
Guest
21 days 9 hours ago

It’s more about the spouse or significant other having an outlet while you gamble. Every Vegas hotel has a jewelry shop, don’t they? That’s so when you go home busted you can bring back a treat and avoid divorce. LOL

Gene Detroyer
BrainTrust

Maybe the women will drop the men off at the casino while they shop the rest of the store. Am I being too sexist?

Liza Amlani
BrainTrust

Oh Gene … most definitely. Saks will no doubt reap the benefits of casino engagement across any gender or race for that matter.

Saks, aka the house, will most definitely win.

John Hyman
Guest
21 days 9 hours ago

Real, not sexist. Every Vegas hotel has an expensive jewelry store for a reason.

Michael La Kier
BrainTrust

Gambling + Retail = Retailtainment at its finest?!? This seems a bit out of place IMHO. A high-end, art deco casino kinda fits, but it takes the Saks brand into an entirely new place.

Shelley E. Kohan
BrainTrust

A big mistake for Saks who keeps trying to add more businesses to its over-stored retail footprint. Citi Field is a much better choice for a casino entity! It’s better for the city and the New York Community and a casino would align better with a sporting/hotel complex.

Gene Detroyer
BrainTrust

As I understand it, this is a Monte Carlo experience … which would not fit in Citi Field.

Rich Kizer
BrainTrust

I think this is the kind of thing that flares at first, and then evens out. The concern I would have is the customer profile expected over the longer run. No doubt, at first, the well heeled customers are going to come and see, and play. There are wonderful casinos in Vegas, but a few of them have lost customers as the customer demographics have changed. My thoughts: caution. It could be fun at first, and then…?

Jeff Sward
BrainTrust

Talk about a differentiator! I worked at Saks many years ago and I love the romantic side of this whole idea. The practical side might get a little complicated. My bingo card for retail extensions did not include opening a casino, but I love this level of out-of-the-box thinking, all while reminding myself that it can go totally off the rails.

Brian Delp
BrainTrust
21 days 15 hours ago

This is a unique play at experiential retail. Shopping is a key component of many casinos already, so combining the two is a proven concept. This will also be sure to be a tourism draw to the evolving 5th Ave area as well. I’m sure if Barneys was still around, their hat would be in the mix as well.

Gene Detroyer
BrainTrust

This is a unique opportunity. It isn’t for Macy’s or even Bloomingdale’s. The upscale, luxury aspect described makes a powerful statement about what Saks is and the profile they want to project.

Indeed, gambling is a money maker. But this endeavor seems to be more about marketing an idea than the bottom line. Jackets for men, of course. No sneakers allowed, please.

Ian Percy
BrainTrust

Is the idea that a casino will somehow increase sales at Saks or is a casino simply an independent revenue generator for the property? If the latter, have at it. That’s just what the world needs, an upscale place where rich corporations win and rich people lose.

BUT — if it is meant to impact retail sales, that points to a very sad circumstance for retail generally. We had an item the other day about malls having open bars, staged entertainment and fire pits in the hope of attracting more shoppers. All of this points to a growing desperation. Like using gravy to coverup a lousy meal.

All of these futile efforts, it seems to me, are but a distraction from encouraging people to actually buy something. Should we expect to see malls with slot machines spread throughout? Where there are diversions … traffic ≠ sales!

Gene Detroyer
BrainTrust

But, no traffic = no sales.

Ian Percy
BrainTrust

True. Both statements are correct. What is missing in this Saks example — and most others — is a connection or congruence between the “attraction” and actual sales. That way it becomes a sales tool not a distraction from sales. If I got $5 in chips or tokens for every $100 I spent in the store I’d probably drop into the casino after shopping. 99% of the time those “free” tokens would make money for the operation because no one would stop after using them. Or if there is to be a stage performance the same approach could be used to earn a seat by buying stuff. This is a very old strategy in retail but usually the incentive and the purchase are the same thing. When they’re not, we’ve got to create a connection.

Gary Sankary
BrainTrust

The odds are this will be a huge success. Will it bolster the Saks brand? I bit skeptical that the people who will come in to gamble will stay to shop. Now that I think about it, any gambling I’ve ever done leaves me not wanting to shop or spend any money for while. Maybe if i won occasionally….

Bottom line: while this will attract traffic to the building, I don’t see lots of cross-spend happening.

Gene Detroyer
BrainTrust

Somebody is supporting all those stores in Vegas.

John Hyman
Guest
21 days 8 hours ago

So what? Lease the space for a percentage of the take, and Saks might garner greater profitability than peddling rags. Other stores lease shops-within-shops in this way, don’t they?

Brandon Rael
BrainTrust

Saks Fifth Avenue is a retail brand that is ripe for disruption. Their luxury department business model has remained consistent throughout their 100-plus-year history in NYC. As we have seen, the lines between retail and hospitality entertainment are evolving, transforming, and blurring.

While there may be critics, the Hudson’s Bay Company may be onto something very innovative and creative to change the narrative around Saks Fifth Avenue with an immersive and entertaining casino space. Even historic retailers must reinvent, evolve and transform their brand purpose and narratives. This will draw plenty of interest and traffic into the NYC Saks Fifth Avenue flagship store.

It will be fascinating to see how this plays out.

Richard Hernandez
BrainTrust

Why not? Retail business needs a differentiator in the market so why not a casino? It works in Las Vegas, and I don’t see why it would not work here.

Leigh Roberts
Guest

That rendering is laughable. There’s no more glamour in casino life in the US — this isn’t Monaco. Has anyone seen Vegas lately? Tourists aren’t going to dress for this and New Yorkers may go when it’s new and a novelty.

Melissa Minkow
BrainTrust

I love the idea of an exclusive, luxurious space at the top of the store to align with branding, but I’m not sure a casino does that. I’m open to changing my mind on this one, but no matter how aesthetically pleasing a casino is, I’m just not sure it’s the right move for this type of retailer.

Ken Lonyai
BrainTrust

Come on … the retail net gain is going to be small. There may be some branding benefit if things go well over time. The real money here is in the gaming and since that will essentially be an independent venture they are spinning up in one location only, this sounds like a lot of Saks people convincing themselves that in this novelty, they’ve found something brilliant, rather than focusing on improving their craft.

Craig Sundstrom
Guest

Tom’s article didn’t say — and I wasn’t willing to pay to find out — but I imagine the casino would be physically separate from the store; which is to say this is really more about the building than the retail operations. And that makes a lot of sense, since Saks’s owners heritage is in real estate (and they seem to have a lot more ideas about “monetizing” their real estate than they do improving the stores … not that the ideas actually work).

I don’t think this is, ultimately, a good idea … for Saks or NYC. The country already has a city where you can mix gambling and high-end shopping: it’s called Las Vegas … and I don’t see it as something to emulate.

Mark Self
BrainTrust

Sure. Let’s have gambling everywhere. When I think of Sakes Fifth Avenue in Manhattan, I think of … new shooter coming out, or putting it all on black….

Sounds like another distraction from the shopping experience. Yet another sign of the apocalypse.

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Braintrust
"Gambling + Retail = Retailtainment at its finest?!? This seems a bit out of place IMHO."

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