P. Schoenfeld Asset Management Calls for Corporate Governance Improvements at Underperforming...

P. Schoenfeld Asset Management Calls for Corporate Governance Improvements at
Underperforming Saks Incorporated

NEW YORK, May 18 /PRNewswire/ -- P. Schoenfeld Asset Management LP (PSAM)
today announced that its definitive proxy statement calling for corporate
governance improvements at underperforming Saks Incorporated (NYSE: SKS) has
been filed with the U.S. Securities and Exchange Commission, and that it has
commenced mailing definitive proxy materials to Saks shareholders of record as
of the close of business on April 6, 2009.

In a letter accompanying the proxy material, PSAM, which owns approximately
1.5% of Saks' total shares outstanding, urges Saks shareholders to take the
following steps as a way of making Saks and its Board of Directors, both of
which are underperforming in PSAM's view, more accountable:

-- Withhold their support for the re-election of C. Warren Neel to the
Saks
Board. Mr. Neel currently is a member of Saks' Governance and
Nominating Committee, which in the view of PSAM has failed Saks and
its
shareholders.

-- Vote to end Saks' staggered Board. PSAM believes that Saks'
staggered Board, which provides that directors are elected for
three-year terms, reduces Board member accountability and breeds
complacency. PSAM believes that shareholders should have the
opportunity to vote for all Board members each year.

-- Support the proposal submitted by the New England Carpenters'
Pension Fund to implement majority voting for Board member elections.
PSAM believes that majority voting in the election of directors is
necessary to hold Saks' directors accountable for their actions.

The full text of the letter from PSAM to Saks shareholders follows:

May 18, 2009

IT'S TIME SAKS' CORPORATE GOVERNANCE PRACTICES ENTER THE 21ST CENTURY

Dear Fellow Saks Shareholder:

As shareholders of Saks Incorporated ("Saks" or the "Company"), you deserve a
board of directors that is accountable to you. At Saks, you don't have it.

-- Saks has recently suffered its worst period of share price performance
of the decade.

-- The Company's 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.

We at P. Schoenfeld Asset Management LP (PSAM) believe that Saks'
under-performance is not just a result of the current problems in the luxury
retail sector. Saks' operating margins were far below industry average even
during the boom years for luxury retail, and Saks has much lower sales per
square foot and profit margins than Neiman Marcus, the luxury department store
chain we consider most comparable to Saks. We believe this inferior
performance is due in large part to Saks' presence in many locations which, as
a result of low sales productivity, generate an unsatisfactory return on
investment. 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.

Consistent Underperformance - Saks' Operating Margins v. Peers: 2006-2008

Company 2006 2007 2008
Dillard's 4.2% 2.2% -1.7%
J. C. Penney 9.8% 9.7% 6.3%
Macy's 7.8% 7.9% 5.6%
Nordstrom(1) 11.7% 12.7% 9.0%
Neiman Marcus NA 10.9% 10.1%
------ ------- -------
Average 8.4% 8.7% 5.9%

Saks 2.2% 4.3% -3.9%
Difference -6.1% -4.4% -9.8%

Note: 2008 refers to most recent completed fiscal year

(1) Margin figures exclude results from the credit card segment, for
purposes of comparability
Source: SEC Filings and Company Reports, adjusted for extraordinary items

SAKS' BOARD SHOULD BE HELD ACCOUNTABLE

Shareholders are entitled to hold board members accountable for Saks' poor
performance. The current directors have been on the board for an average of
12 years. Given Saks' track record, we have little confidence that this board
can enhance or create shareholder value. Unfortunately, Saks' current
corporate governance practices do not meaningfully allow us, as shareholders,
to hold the board accountable for its actions. Saks' classified board only
allows shareholders to vote on one-third of the directors each year, while
two-thirds of the directors get a free ride even in years such as this when
Saks has disappointed shareholders.

For instance, Stephen Sadove, Saks' chief executive officer, is not up for
re-election this year. Sadove's strategy of deeply slashing prices in
November 2008 has been identified by The Wall Street Journal as being the
"first tug on a thread that's now unraveling long-established rules of the
luxury goods industry." According to The Journal, "The changes
are...destroying the very air of exclusivity that designers are trying to
sell." Mr. Sadove, as reported in a recent Wall Street Journal article,
agreed that a big question is whether, after the recent deep price discounts,
people will ever pay full price again for luxury products. We believe that
Sadove's strategy of deeply discounting Saks' inventory will make it difficult
for Saks to command premium pricing and will create long-term problems for the
Saks brand.

SHAREHOLDERS WILL NOT BE ABLE TO EXPRESS THEIR VIEWS ON SADOVE'S PERFORMANCE
UNTIL 2011

Shareholders can, however, express their views with respect to C. Warren Neel,
a member of Saks' Governance and Nominating Committee and, to our knowledge,
the resident corporate governance expert on the Saks board. The Governance
and Nominating Committee is supposed to ensure that Saks' corporate governance
practices are in the best interests of Saks and its shareholders.

We believe that, as evidenced by Saks' current lackluster corporate governance
practices, the Governance and Nominating Committee has failed Saks under Mr.
Neel's leadership. Accordingly, we recommend that you withhold votes for Mr.
Neel, which will send a strong message to Saks' management.

SEND A STRONG MESSAGE AND PUT AN END TO THE STAGGERED BOARD

Additionally, we believe that Saks should eliminate its classified or
"staggered" board, which currently provides that directors are elected for
three-year terms. We believe staggered boards reduce board member
accountability and breed complacency by allowing directors to serve for
extended terms without giving shareholders the opportunity to vote for change.
We believe shareholders should have the opportunity to vote for all of Saks'
directors each year. Ask yourself why Saks' current directors are unwilling
to support submitting themselves to annual elections if they are truly looking
out for your best interests? Declassification of the board would be a
significant start towards improving the corporate governance of the Company
and making the board answerable to shareholders.

Moreover, yearly election of directors has become a basic tenet of good
governance. PSAM believes that corporate governance best practices now
include the annual election of directors and that there is a beneficial trend
among large corporations, including major retailers, to eliminate the
classified board. In recent years, many companies have declassified their
boards and, currently, over two-thirds of the largest 100 companies and a
majority of companies in the S&P 500 have declassified boards. Shareholders
at other companies favor declassified boards - shareholder proposals seeking
annual election of directors received an average of at least 60% support in
2005, 2006, 2007 and 2008. Saks is clearly out of step with best practices
with respect to the structure of its board of directors.

We find it very disappointing that the Saks board takes no position on our
proposal to declassify the board. We believe that a board of directors has an
obligation to show leadership on corporate governance. If the board thinks
the annual election of all directors is a good thing, it should say so. If
the board believes that Saks should retain its staggered board, it should
explain why a staggered board is good for Saks' shareholders. We believe that
the failure to take any position on this important issue is emblematic of the
Saks board's disappointing record on corporate governance.

WHY HAS THE BOARD KEPT SILENT ABOUT SUCH A CRITICAL CORPORATE GOVERNANCE
ISSUE?

We think the board should tell shareholders what it will do if the
declassification proposal is adopted. We believe there is only one proper
course of action: if the declassification proposal is adopted by the
shareholders, the board should propose an amendment to Saks' certificate of
incorporation to eliminate the staggered board at the 2010 annual meeting.

Over two weeks have passed since the board filed its proxy statement with the
SEC, and Saks still has not done a broad mailing of proxy materials to its
shareholders. So far the board seems content to rely on the electronic
delivery of its proxy materials, which traditionally has led to lower levels
of participation by smaller and non-institutional shareholders. This suggests
to us that Saks is comfortable acting on the basis of votes of a few large
holders and brokers exercising discretionary voting power. In our opinion,
Saks' reliance on a narrow shareholder base is another example of the board's
failure of leadership on corporate governance and indifference to the views of
shareholders. We believe that the board has an obligation to seek out the
views of a large population of shareholders on the important issues that will
be voted upon at the annual meeting.

We believe that a staggered board serves only to protect management and
sitting board members, letting them keep their jobs and compensating them very
well, irrespective of the Company's performance. We also believe that these
measures render the board complacent and reticent to adopt new ideas or think
progressively in terms of building shareholder value. This does not protect
shareholders.

SAKS SHOULD ADOPT MAJORITY VOTING FOR DIRECTORS

The New England Carpenters' Pension Fund has submitted a majority voting
proposal to be voted upon at the 2009 annual meeting of shareholders. We
fully support that majority voting proposal and believe majority voting,
coupled with a director resignation policy, is necessary to hold Saks'
directors accountable for their actions.

Although Saks' proxy card complies with legal requirements because it allows
shareholders to withhold votes from one or more director candidates, such a
withhold option is an ineffective way of expressing dissatisfaction.
Shareholders may voice their opinion of a director's performance by
withholding votes, but, under Saks' current policies, a director who fails to
receive a majority of the votes is still re-elected. The harmful effects of
Saks' plurality voting system are exacerbated by the fact that Saks does not
have a director resignation policy. A nominee, who is elected with more
"withholds" than affirmative votes, has no obligation to tender his or her
resignation. Thus, a director with as few as one vote can serve out a
three-year term as a director on Saks' classified board.

Majority voting has become a basic tenet of good governance. According to one
study, over two-thirds of the companies in the S&P 500 have adopted either
majority voting or require a director to resign if he or she receives less
than a majority of the votes cast. Less than a third use Saks' plurality
standard. A substantial number of small companies have also adopted majority
voting or resignation policies -- resulting in almost half the companies in
the Russell 1000 adopting majority voting or resignation policies.

A reader of Saks' Corporate Governance Guidelines might gain the impression
that Saks already has majority voting. The Guidelines state that Saks'
plurality voting process "allows the holders of a majority of the Company's
outstanding shares to elect all of the Directors." The Corporate Governance
Guidelines fail to point out that under the plurality voting system, even if
the holders of a majority of the shares express their disapproval of a board
nominee by checking the "withhold" box on their proxy cards, the nominee can
be elected with just one vote in favor of the nominee's election in an
uncontested election.

The board's statement of opposition to the majority voting proposal claims
that under majority voting "a few large shareholders could thwart the will of
the Company's voting shareholders by withholding votes from the board's
nominees." We fail to understand the logic of this statement. If the holders
of a majority of the Company's shares want the board's nominees to be
re-elected, they will vote for these nominees, and these nominees will be
re-elected, regardless of what a few large shareholders do. If Saks' board
were truly committed to its members being elected by the will of a majority of
the shares, it would have recommended shareholders to vote FOR the majority
voting proposal. Although we believe that Saks claims that it seeks to
provide a majority of shareholders with a voice in the company, we believe
that its governance policies merely entrench the board and prevent
shareholders from holding directors accountable.

We urge you to vote FOR the majority voting proposal and send an unequivocal
message to the board that it is time that shareholder interests come first.

PLEASE SUPPORT OUR INITIATIVES TO BRING SAKS' CORPORATE GOVERNANCE PRACTICES
INTO THE 21st CENTURY TODAY. YOU MAY VOTE BY TELEPHONE OR THE INTERNET OR BY
SIGNING, DATING AND RETURNING THE GOLD PROXY CARD.

Sincerely,

Peter Schoenfeld
Managing Director
P. Schoenfeld Asset Management LP

If you have any questions, require assistance with voting your GOLD proxy
card, or need additional copies of the proxy materials, please contact:

MacKenzie Partners, Inc.
105 Madison Avenue
New York, NY 10016

saksproxy@mackenziepartners.com

(212) 929-5500 (Call Collect)
Or
TOLL-FREE (800) 322-2885

IMPORTANT INFORMATION
P. Schoenfeld Asset Management LP and related parties participating in the
solicitation of proxies ("PSAM") filed its definitive proxy statement with the
U.S. Securities and Exchange Commission on May 15, 2009 relating to PSAM's
solicitation of proxies from the stockholders of Saks Incorporated ("Saks")
with respect to the Saks' 2009 annual meeting of shareholders. The definitive
proxy statement contains detailed information regarding the names, affiliation
and interests of individuals who may be deemed participants in the
solicitation of proxies of Saks' shareholders. PSAM will also be filing a
definitive proxy statement and other relevant documents, including a GOLD
proxy card. PSAM ADVISES SECURITY HOLDERS TO READ THE DEFINITIVE PROXY
STATEMENT AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

PSAM's proxy statement and other relevant documents may be obtained without
charge from the SEC's website at www.sec.gov and from PSAM by contacting
MacKenzie Partners, Inc. by telephone at (800) 322-2885 or by e-mail at
saksproxy@mackenziepartners.com.

SOURCE P. Schoenfeld Asset Management LP

Media, Steve Bruce or Chuck Dohrenwend, The Abernathy MacGregor Group,
+1-212-371-5999; or Investors, Dan Burch, Laurie Connell or Keith Parnell,
Mackenzie Partners, Inc., +1-212-929-5500 or +800-322-2885, or
saksproxy@mackenziepartners.com