Beleaguered high-end department store conglomerate Saks Global filed for bankruptcy protection on Tuesday, a month after missing the deadline on a $100m interest payment, in one of the largest retail collapses since the pandemic.
Barely a year after a deal brought the chains Saks Fifth Avenue, Bergdorf Goodman and Neiman Marcus together, Saks Global said it had filed for chapter 11 bankruptcy “to facilitate its ongoing transformation”.
Such a move can provide a company with more time to restructure its finances without having to shut down. Saks Global said early on Wednesday its stores would remain open for now after it finalised a $1.75bn financing package and appointed a new CEO.
Geoffroy van Raemdonck, the former Neiman Marcus CEO, will replace Richard Baker, who was the architect of the acquisition strategy that left Saks Global saddled with debt.
Saks Fifth Avenue, the retail arm of Saks Global, listed $1bn to $10bn in assets and liabilities, according to documents filed in US bankruptcy court in Houston, Texas.
In the year after Saks and Neiman Marcus combined to form Saks Global, the company became addled with issues, including overdue payments to vendors, who started to withhold inventory. The company’s revenue fell 13% in the second quarter of last year.
The company has been showing signs of struggle over the last few weeks. In late December, the company sold its Neiman Marcus Beverly Hills flagship property. Less than two weeks later, longtime Saks executive and CEO Marc Metrick abruptly announced his resignation.
A retailer long loved by the rich and famous, from Gary Cooper to Grace Kelly, Saks fell on hard times after the Covid pandemic, as competition from online outlets rose, and brands started more frequently selling items through their own stores.
“This is a defining moment for Saks Global, and the path ahead presents a meaningful opportunity to strengthen the foundation of our business and position it for the future,” said van Raemdonck. “In close partnership with these newly appointed leaders and our colleagues across the organization, we will navigate this process together with a continued focus on serving our customers and luxury brands.”
The new financing deal would provide an immediate cash infusion of $1bn through a debtor-in-possession loan from an investor group, Saks Global said.
Financing worth $240m would be available through an asset-backed loan provided by the company’s asset-based lenders, according to the company. The luxury retailer will have access to $500m of financing from the investor group once it successfully exits bankruptcy protection, expected later this year, it added.
A host of luxury brands were among the unsecured creditors, led by Chanel and Gucci owner Kering at about $136m and $60m respectively, the court filing said.
The world’s biggest luxury conglomerate, LVMH, was listed as an unsecured creditor at $26m. In total, Saks Global estimated there were between 10,001 and 25,000 creditors.
In 2024, Baker had masterminded the takeover of Neiman Marcus by Canada’s Hudson’s Bay Co, which had owned Saks since 2013, and later spun off the US luxury assets to create Saks Global, bringing three names that have defined American high fashion for over a century under one roof.
The $2.7bn deal was built on about $2bn in debt financing and equity contributions from investors including Amazon, Salesforce and Authentic Brands. Amazon and Authentic Brands were listed in the court filing as equity investors.
Reuters contributed reporting
