The luxury company seeks a return to midsingle-digit profitability in a couple of years through continued cost cutting, evolving the mix, procuring more exclusives and growing the outlet and Internet businesses, according to Saks chairman and chief executive officer Stephen I. Sadove, who outlined the strategy Wednesday at a Telsey Advisory Group Consumer Conference.

"We will dramatically shift the mix of products consumers want," Sadove said. "Consumers' love of brands isn’t going away. I do believe we are going to have more exclusivity. Walk up and down Madison or Worth Avenue, and you are seeing [fewer] shops," meaning brands closing stores will seek other channels to sell their goods.

"We are working with the vendor community on margin structure, and working on full-price selling," Sadove said. After sharply cutting inventories, healthier margins and greater full-price selling are feasible, he stressed.

Sadove characterized 2007 as a strong year, marked by 12 percent comp-store growth and 4.5 percent operating profit. But last year Saks reported a $154.9 million loss on a 6 percent sales slide. "Despite the tough financial results, a lot of good things did happen," Sadove said, citing a 14.6 percent inventory decline after being bloated by excess supply, carrying out renovations at key locations and implementing new planning and allocation and clienteling systems.