Saks Chairman and CEO Stephen Sadove said the luxury market had $1 billion dollars in excess inventory at that time, so Saks accelerated markdowns straight to 70%. He said, “We took a bloodbath but got the problem behind us and generated cash.” But, it was a one-off event, not something on which to build a new business. Sadove admits the best customer is both buying online and shopping in the store, but strategy is the key… and Hermes may have figured it out. You can buy basics online, but you can’t buy the latest Hermes bag on the web — you can only research it, forcing you to go to the retail store if you want to close the deal. – from Styleite