Saks Incorporated Agrees to Sell Parisian to Belk, Inc. for $285 Million

In the transaction, Charlotte, North Carolina-based Belk willacquire Parisian's operations consisting of real and personalproperty, operating leases, and inventory associated with 38 Parisianstores, a 125,000 square foot administrative/headquarters facility inBirmingham, Alabama, and a 180,000 square foot distribution centerlocated in Steele, Alabama. The 38 stores being sold represent 4.6million gross square feet and are located throughout nine Southeasternand Midwestern states. Parisian generated 2005 revenues ofapproximately $723 million. Belk acquired the Company's Proffitt's andMcRae's businesses in July 2005.

The transaction is subject to customary closing conditions,including the expiration or termination of all waiting periods underthe Hart-Scott-Rodino Antitrust Improvements Act, and is expected tobe completed in the third fiscal quarter of 2006.

When the closing occurs, all Parisian associates will become Belkemployees. Belk will provide appropriate severance packages for thosewhom Belk does not retain.

As part of the transaction, the Company will enter into afee-for-services agreement to provide Belk with specified supportservices, including information technology, credit services, and otherback office support functions, for a limited period of time.

Steve Sadove, Chief Executive Officer of Saks Incorporated, noted,"Last year, the Company established a process to carefully considerits mix of businesses and their future potential to create shareholdervalue. Through this process, we have considered whether there weretransactions available for certain of our assets that could createvalue greater than we could generate through execution of theCompany's operating strategies. This review identified a significantopportunity to create shareholder value through monetizing ourslower-growth department store businesses. Consequently, we sold ourProffitt's/McRae's business to Belk for $623 million in July 2005 andour NDSG business to Bon-Ton for $1.185 billion in March 2006."

Sadove continued, "The sale of our Parisian business is the nextappropriate step in this process and one that will allow us to focusour time and resources on improving the operations of our core SaksFifth Avenue business. I believe this transaction is in the long-termbest interests of our Company and its shareholders. Belk is familiarwith our Company, our stores, and our associates, and Parisian makes anice geographic fit for Belk.

"Upon completion of this transaction, the Company will havegenerated nearly $2.0 billion in cash from the sales ofProffitt's/McRae's, NDSG, and Parisian. Thus far, we have used aportion of the proceeds to pay a $4 per share special dividendtotaling approximately $550 million, to purchase nearly $225 millionin common stock, and to reduce indebtedness by over $600 million. TheCompany currently has invested cash of approximately $500 million andno principal borrowings under its revolving credit facility. Webelieve we have a strong balance sheet, and we are confident about thefuture performance of the SFAE business. As a result, we currentlybelieve that it will be appropriate to distribute a substantialportion of existing cash plus the net proceeds from the Parisian saleto our shareholders. We are reviewing strategies to do so, includingshare repurchases, a special cash dividend, or a combination of thetwo."

Management estimates that the transaction will essentially bebreak even on both a book and tax basis. These estimates arepreliminary and subject to change.

Citigroup and Goldman Sachs & Co. were retained to advise theCompany on the Parisian strategic alternative process.

Corporate Structure

The Company currently maintains many of its support staff andexecutive functions in the Birmingham office facility to be sold toBelk. By the end of the first fiscal quarter of 2007, the Companyexpects that it will have consolidated the executive functions intothe existing Saks Fifth Avenue home offices in New York City, wherethe Company's CEO is located, and that the support staff functionsalso will be consolidated into one of the Company's facilities.Approximately 125 Saks Incorporated associates, primarily in the areasof finance/accounting, human resources, and legal, perform thesesupport staff and executive functions in the Birmingham officefacility. The Company will make severance payments, in accordance withthe Company's severance policies, plans, and agreements, to theseassociates if the Company does not relocate them to the Company'sother offices.

The Company's operations center located in Jackson, Mississippihouses several support functions including information technology,credit services, general accounting, accounts payable, andprocurement. The operations center will continue to fulfill thetransition service agreements and to support SFAE on an ongoing basis.

About the Companies

Saks Incorporated

Upon consummation of the transaction with Belk, Saks Incorporatedwill operate Saks Fifth Avenue Enterprises (SFAE) and Club Libby Lu.SFAE consists of 54 Saks Fifth Avenue stores, 50 Saks Off 5th stores,and saks.com and generated 2005 revenues of approximately $2.7billion.

Club Libby Lu, a 62-unit specialty store chain catering to"tweens," generated 2005 revenues of approximately $46 million.

Belk, Inc.

Charlotte, North Carolina based Belk, Inc. is the nation's largestprivately-owned department store company with 277 stores in 16Southeastern states.

Forward-looking Information

The information contained in this press release that addressesfuture results or expectations is considered "forward-looking"information within the definition of the Federal securities laws.Forward-looking

information in this document can be identified through the use ofwords such as "may," "will," "intend," "plan," "project," "expect,""anticipate," "should," "would," "believe," "estimate," "contemplate,""possible," and "point." The forward-looking information is premisedon many factors, some of which are outlined below. Actual consolidatedresults might differ materially from projected forward-lookinginformation if there are any material changes in management'sassumptions.

The forward-looking information and statements are or may be basedon a series of projections and estimates and involve risks anduncertainties. These risks and uncertainties include such factors as:the level of consumer spending for apparel and other merchandisecarried by the Company and its ability to respond quickly to consumertrends; adequate and stable sources of merchandise; the competitivepricing environment within the department and specialty storeindustries as well as other retail channels; the effectiveness ofplanned advertising, marketing, and promotional campaigns; favorablecustomer response to relationship marketing efforts of proprietarycredit card loyalty programs; appropriate inventory management;effective expense control; successful operation of the Company'sproprietary credit card strategic alliance with HSBC Bank Nevada,N.A.; geo-political risks; changes in interest rates; the outcome ofthe formal investigation by the Securities and Exchange Commission andthe inquiry the Company understands has been commenced by the Officeof the United States Attorney for the Southern District of New Yorkinto the matters that were the subject of the investigations conductedduring 2004 and 2005 by the Audit Committee of the Company's Board ofDirectors and any related matters that may be under investigation orthe subject of inquiry; the ultimate amount of reimbursement tovendors of improperly collected markdown allowances; the ultimateimpact of improper timing of recording of inventory markdowns; theultimate impact of incorrect timing of recording of vendor markdownallowances; the outcome of the shareholder litigation that has beenfiled relating to the matters that were the subject of the AuditCommittee's initial investigation; the effects of the delay in thefiling with the SEC of the Company's Form 10-K for the fiscal yearended January 29, 2005 and its Quarterly Reports on Form 10-Q for thefiscal quarters ended April 30, 2005 and July 30, 2005; and thesuccessful consummation of the Parisian transaction. For additionalinformation regarding these and other risk factors, please refer toExhibit 99.1 to the Company's Form 10-K for the fiscal year endedJanuary 28, 2006 filed with the SEC, which may be accessed via EDGARthrough the Internet at www.sec.gov.

Management undertakes no obligation to correct or update anyforward-looking statements, whether as a result of new information,future events, or otherwise. Persons are advised, however, to consultany further disclosures management makes on related subjects in itsreports filed with the SEC and in its press releases.