The board of Birmingham, Ala.-based Saks Inc. has decided to split the company in two, leaving Saks Fifth Avenue and other Saks operations as one entity, and the mid-level department stores chains that it operates as another. The new Saks Fifth Avenue Enterprises will manage Saks Fifth Avenue, Saks Direct and Saks Off 5th outlet stores, and the chain's catalog and Internet operations.

Saks Inc., which will change its name, will continue to manage the other stores in the chain, which include Proffitt's, McRae's and Parisian. Saks Inc. has come up short on its earning estimates for three straight quarters, and its stock has dropped 50% since its merger with Proffitt's a few years ago.