5 Questions for Saks CEO

NEW YORK (TheStreet) -- Saks(SKS) has made a remarkable recovery since the depths of the recession, as the luxury shopper returns quicker than even the company's chief executive ever imagined.

CEO Steve Sadove told TheStreet that Saks took advantage of the recession, making significant changes that are now starting to bear fruit.

Earlier this week, the high-end department store reported significantly higher third-quarter profit, as sales rose and margins increased due to a pull-back in discounting.

During the quarter, Saks earned $36.3 million, or 20 cents a share, compared with $6.3 million, or 4 cents, in the year-ago period. Excluding items, the company actually earned 6 cents a share, better than the 3 cents analysts predicted.

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Sales grew 4.3% to $658.8 million, while same-store sales shot up 5.7%. Gross margin widened to 42.6% from 40.3% from more full-price selling.

Looking ahead to the holiday season, Saks is expecting fourth-quarter sales to grow in the mid-single-digit range.

This recovery has caught the attention of investors and last month Italian businessman Diego Della Valle raised his stake in Saks to 19% -- a move that prompted yet another flurry of takeover speculation. Sadove declined to comment on these rumors.

But while Saks has bounced back from its lows, becoming one of the standouts in the retail sector, Sadove still has trepidations. Read on to see what will calm Sadove's lingering fears and his outlook for the luxury consumers.

TheStreet: What did Saks learn from the recession?

Sadove: When the recession hit the company and the sector took an enormous punch to the stomach, you saw the entire sector go down 20% to 25%. We stole a line from Rahm Emanuel, "Don't let a good recession go to waste."