Saks CEO Bets on Technology, Not Stores

NEW YORK (TheStreet) -- Saks (SKS) CEO Steve Sadove doesn't foresee future growth in brick-and-mortar stores.

Sadove addressed journalists at the Society of American Business Editors and Writers taking place in New York this weekend, providing insight into the luxury retailer's focus in Internet, social and mobile commerce.

Saks has closed seven stores over the past two years and plans to shutter several more, with few plans on opening any new locations.

"I don't think the U.S. needs new stores," Sadove said.

This appears to be the sentiment in the retail space, with Gap (GPS) announcing on Thursday it will close 189 namesake U.S. stores by 2013. This will leave 700 Gap stores from 1,056 in 2007.

"Technology represents the biggest growth opportunity for all of us," Sadove said. "We put a robotic system in our distribution center ...We have little robots around picking the product ..."

Even in the luxury space, which has typically been defined by its one-on-one customer service, social media is playing a significant role. "So much of how people shop is by recommendations of friends," Sadove said.

Saks plans to tap into those Facebook recommendations, but did not divulge details on how exactly it will connect to Facebook users.

Competition is also evolving, with online players like Gilt and Net-a-Porter becoming just as prominent as a Neiman Marcus or Bloomingdales.

Looking toward the second half of the year, Sadove said he doesn't expect to see the same buoyancy as the beginning of the year. Nonetheless, he believes the luxury sector is poised for a strong holiday season. While the National Retail Federation is predicting a 2.8% rise in sales for the entire space, Sadove said Saks is forecasting sales in the mid-to high-single digits.

Holiday will continue to be promotional, but Saks is weaning shoppers off discounts two years after it made headlines for slashing prices by 70% during the holiday.