Hope is not enough for a

Saks

(SKS)

turnaround -- or such is the argument being made by P. Schoenfeld Asset Management, which owns about 1.5% of the company's total shares.

The group urged shareholders in a proxy letter to withhold their support for the re-election of C. Warren Neels to the company's board, to vote to end the company's staggered board and to approve a proposal to implement majority voting for board member elections, as the department store suffers its worst period of share performance in a decade.

Saks has consistently underperformed its competitors, including

Neiman Marcus

, with operating margins far below the industry average, the group wrote. And while the luxury market is tanking, P. Schoenfeld said the weak performance is not only due to the souring economy.

"We believe this inferior performance is due in large part to Saks' presence in many locations, which, as a result of low sales productivity, generates an unsatisfactory return on investment," P. Schoenfeld wrote. "The Saks board has been remiss in not insisting on a more rigorous allocation of capital by management. It appears that the board is hoping that yet another 'turnaround' strategy will succeed in revitalizing the company when previous ones have not. Simply put, hope is not an effective strategy."

Saks' stock price has averaged approximately $2.89 per share since the beginning of 2009 and at one point this year reached an all-time low of $1.55 per share.

P. Schoenfeld believes Neels has failed the company, and the staggered board, which allows directors to be elected for three-year terms, "breeds complacency."

Shares of the company soared 13% to $3.73 in afternoon trading.

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