General	3 Months Ended
Apr. 30, 2011
General
General	NOTE 1 – GENERAL BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") for interim financial information and in compliance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement have been included. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Operating results for the three months ended April 30, 2011 are not necessarily indicative of the results that may be expected for the fiscal year ending January 28, 2012 ("fiscal year 2011"). The financial statements include the accounts of Saks Incorporated and its subsidiaries (collectively, the "Company"). All intercompany amounts and transactions have been eliminated. The accompanying condensed consolidated balance sheet as of January 29, 2011 has been derived from the audited financial statements at that date but does not include all disclosures required by GAAP. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended January 29, 2011. The Company's operations consist of Saks Fifth Avenue ("SFA"), Saks Fifth Avenue OFF 5TH ("OFF 5TH"), and SFA's e-commerce operations ("Saks Direct"). SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES *Net Sales* Net sales include sales of merchandise (net of returns and exclusive of sales taxes), commissions from leased departments, shipping and handling revenues related to merchandise sold and breakage income from unredeemed gift cards. Commissions from leased departments were $8,726 and $7,367 for the three months ended April 30, 2011 and May 1, 2010, respectively. Leased department sales were $63,415 and $54,116 for the three months ended April 30, 2011 and May 1, 2010, respectively, and were excluded from net sales in the accompanying condensed consolidated statements of income. *Cash and Cash Equivalents* Cash and cash equivalents primarily consist of cash on hand in the stores, deposits with banks, and investments with banks and financial institutions that have original maturities of three months or less. Cash equivalents are stated at cost, which approximates fair value. Cash equivalents totaled $192,786, $190,007, and $170,573 at April 30, 2011, January 29, 2011, and May 1, 2010, respectively, primarily consisting of money market funds, demand deposits, and time deposits. Income earned on cash equivalents was $244 and $119 for the three-month periods ended April 30, 2011 and May 1, 2010, respectively, and is included in other income in the condensed consolidated statements of income. Included in cash equivalents as of January 29, 2011 and May 1, 2010 were $10,000 and $20,000 compensating balances related the Company's purchasing card program to ensure future credit availability under that program. There were no compensating balance arrangements as of April 30, 2011. *Inventory* Merchandise inventories are stated at the lower of cost or market and include freight, buying, and distribution costs. The Company takes markdowns related to slow moving inventory, ensuring the appropriate inventory valuation. The Company receives vendor-provided support in different forms. When vendors provide support for inventory markdowns, the Company records the support as a reduction to cost of sales. Such support is recorded in the period that the corresponding markdowns are taken. When the Company receives inventory-related support that is not designated for markdowns, the Company includes this support as a reduction in the cost of purchases. *Impairments and Dispositions* Impairment and disposition costs include costs associated with store closures, including employee severance and lease termination costs, asset impairment and disposal charges, and other costs related to store closure activities. Additionally, impairments and disposition costs include long-lived asset impairment charges related to assets held and used and losses related to asset dispositions made during the normal course of business. The Company continuously evaluates its real estate portfolio and closes underproductive stores in the normal course of business as leases expire or as other circumstances dictate. During the three months ended April 30, 2011, the Company incurred store closing costs of $2,868 primarily due to a lease termination fee for the relocation of its Hilton Head OFF 5TH store. During the three months ended May 1, 2010, the Company announced the planned closure of three SFA locations and incurred store closing costs of $1,815 primarily related to employee severance and lease termination fees. *Segment Reporting* SFA, OFF 5TH, and Saks Direct have been aggregated into one reportable segment based on the aggregation criteria outlined in the authoritative accounting guidance. *Fair Value of Financial Instruments* The carrying value of the Company's financial instruments, including cash and cash equivalents, receivables, accounts payable, and accrued expenses as of April 30, 2011, January 29, 2011, and May 1, 2010 approximates their fair values due to the short-term nature of these financial instruments. See Note 5 for fair value disclosures related to the Company's long-term debt.

NOTE 1 – GENERAL

BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") for interim financial information and in compliance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement have been included. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Operating results for the three months ended April 30, 2011 are not necessarily indicative of the results that may be expected for the fiscal year ending January 28, 2012 ("fiscal year 2011"). The financial statements include the accounts of Saks Incorporated and its subsidiaries (collectively, the "Company"). All intercompany amounts and transactions have been eliminated.

The accompanying condensed consolidated balance sheet as of January 29, 2011 has been derived from the audited financial statements at that date but does not include all disclosures required by GAAP. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended January 29, 2011.

The Company's operations consist of Saks Fifth Avenue ("SFA"), Saks Fifth Avenue OFF 5TH ("OFF 5TH"), and SFA's e-commerce operations ("Saks Direct").

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Net Sales

Net sales include sales of merchandise (net of returns and exclusive of sales taxes), commissions from leased departments, shipping and handling revenues related to merchandise sold and breakage income from unredeemed gift cards. Commissions from leased departments were $8,726 and $7,367 for the three months ended April 30, 2011 and May 1, 2010, respectively. Leased department sales were $63,415 and $54,116 for the three months ended April 30, 2011 and May 1, 2010, respectively, and were excluded from net sales in the accompanying condensed consolidated statements of income.

Cash and Cash Equivalents

Cash and cash equivalents primarily consist of cash on hand in the stores, deposits with banks, and investments with banks and financial institutions that have original maturities of three months or less. Cash equivalents are stated at cost, which approximates fair value. Cash equivalents totaled $192,786, $190,007, and $170,573 at April 30, 2011, January 29, 2011, and May 1, 2010, respectively, primarily consisting of money market funds, demand deposits, and time deposits. Income earned on cash equivalents was $244 and $119 for the three-month periods ended April 30, 2011 and May 1, 2010, respectively, and is included in other income in the condensed consolidated statements of income. Included in cash equivalents as of January 29, 2011 and May 1, 2010 were $10,000 and $20,000 compensating balances related the Company's purchasing card program to ensure future credit availability under that program. There were no compensating balance arrangements as of April 30, 2011.

Inventory

Merchandise inventories are stated at the lower of cost or market and include freight, buying, and distribution costs. The Company takes markdowns related to slow moving inventory, ensuring the appropriate inventory valuation. The Company receives vendor-provided support in different forms. When vendors provide support for inventory markdowns, the Company records the support as a reduction to cost of sales. Such support is recorded in the period that the corresponding markdowns are taken. When the Company receives inventory-related support that is not designated for markdowns, the Company includes this support as a reduction in the cost of purchases.

Impairments and Dispositions

Impairment and disposition costs include costs associated with store closures, including employee severance and lease termination costs, asset impairment and disposal charges, and other costs related to store closure activities. Additionally, impairments and disposition costs include long-lived asset impairment charges related to assets held and used and losses related to asset dispositions made during the normal course of business. The Company continuously evaluates its real estate portfolio and closes underproductive stores in the normal course of business as leases expire or as other circumstances dictate.

During the three months ended April 30, 2011, the Company incurred store closing costs of $2,868 primarily due to a lease termination fee for the relocation of its Hilton Head OFF 5TH store. During the three months ended May 1, 2010, the Company announced the planned closure of three SFA locations and incurred store closing costs of $1,815 primarily related to employee severance and lease termination fees.

Segment Reporting

SFA, OFF 5TH, and Saks Direct have been aggregated into one reportable segment based on the aggregation criteria outlined in the authoritative accounting guidance.

Fair Value of Financial Instruments

The carrying value of the Company's financial instruments, including cash and cash equivalents, receivables, accounts payable, and accrued expenses as of April 30, 2011, January 29, 2011, and May 1, 2010 approximates their fair values due to the short-term nature of these financial instruments. See Note 5 for fair value disclosures related to the Company's long-term debt.