Saks Global files for bankruptcy in major retail shake-up
High-end department store conglomerate Saks Global filed for bankruptcy protection late Tuesday, marking one of the largest U.S. retail collapses since the pandemic, just a year after a deal that united Saks Fifth Avenue, Bergdorf Goodman, and Neiman Marcus under one roof.
Despite the filing, the retailer said early Wednesday that its stores would remain open for now after securing a $1.75 billion financing package and appointing a new CEO, News.Az reports, citing Reuters.
Former Neiman Marcus CEO Geoffroy van Raemdonck will replace Richard Baker, the architect of the acquisition strategy that left Saks Global heavily in debt.
Saks Fifth Avenue, the retail arm of Saks Global, reported between $1 billion and $10 billion in assets and liabilities in U.S. Bankruptcy Court filings in Houston, Texas. The bankruptcy process is intended to give the luxury retailer room to negotiate debt restructuring with creditors or sell itself to a new owner to avoid liquidation.
A longtime favorite of the rich and famous, from Gary Cooper to Grace Kelly, Saks struggled after the COVID-19 pandemic as competition from online outlets grew and brands increasingly sold items through their own stores.
The new financing deal provides an immediate cash infusion of $1 billion through a debtor-in-possession loan from an investor group, led by Pentwater Capital Management and Boston-based Bracebridge Capital, according to Reuters. An additional $240 million will be available through an asset-backed loan from the company’s lenders, and the retailer will have access to $500 million more once it successfully exits bankruptcy protection later this year.
A range of luxury brands are listed among Saks Global’s unsecured creditors, led by Chanel and Gucci owner Kering, owed approximately $136 million and $60 million, respectively. LVMH, the world’s largest luxury conglomerate, is listed as an unsecured creditor for $26 million. Overall, Saks Global estimates it has between 10,001 and 25,000 creditors.
In 2024, Baker orchestrated the takeover of Neiman Marcus by Canada’s Hudson’s Bay Co, which had owned Saks since 2013, before spinning off U.S. luxury assets to form Saks Global, bringing together three iconic American fashion names. The $2.7 billion deal relied on roughly $2 billion in debt financing and equity contributions from investors including Amazon, Salesforce, and Authentic Brands, both Amazon and Authentic Brands are listed in court filings as equity investors.
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