Retailer Saks Incorporated is to shutter its unprofitable Club Libby Lu tween girls chain - a decision that will lead to the loss of 1,700 jobs.

The company said in a statement today (5 November) that the closure will lead to a charge of $11m in the third quarter and between $18m and $27m in the fourth quarter.

The store closures are due to be completed by 2 May, and the 1,700 workers will be offered severance packages.

Steve Sadove, chairman and chief executive officer of Saks Inc, said: "Club Libby Lu is an innovative concept that was a better strategic fit with our traditional department store business."

He added that discontinuing the operation "is the appropriate decision so that we can focus 100% of our time and resources on executing the strategies of our core Saks Fifth Avenue business."

Saks Inc bought Club Libby Lu, which targets girls aged four to 12, in 2003 as a growth vehicle and traffic driver for its Saks Department Store Group (SDSG), which it has since sold.

There are 78 Club Libby Lu stand-alone stores in malls nationwide and 20 Club Libby Lu store-in-stores within former SDSG stores.

Saks Inc, which operates 53 Saks Fifth Avenue stores and 49 Saks Off 5th stores, posted a wider second quarter loss of $31.7m.

Quarterly sales fell 3.6% to $669.m and same-store sales dropped 4%.