The partnership had already been under strain when Saks filed for Chapter 11 bankruptcy earlier this month, but the retailer had not previously stated outright that it would exercise its right under bankruptcy law to reject the contract, News.Az reports, citing Reuters.
On Friday, the source said Saks plans to close its Saks on Amazon storefront to concentrate on parts of its business it believes offer stronger growth prospects.
“The Saks on Amazon storefront saw limited brand participation,” the source said, adding that Saks believes it would be better served by directing customers to its own website, Saks.com.
In a statement to Reuters, an Amazon spokesperson said: “Beyond the Saks experience, the Amazon luxury store continues to offer a wide selection of high-end designer styles, and we’re adding more luxury brands regularly.”
The partnership stemmed from Amazon’s $475 million investment in Saks in 2024. Under the agreement, Saks would sell products on Amazon and pay the e-commerce company at least $900 million over eight years.
However, remarks by Amazon’s lawyer at a court hearing following Saks’ bankruptcy filing suggested the relationship had deteriorated and that legal disputes could follow. At the hearing, Amazon’s lawyer argued that Saks improperly pledged its flagship Fifth Avenue store in Manhattan as collateral for a $1.75 billion loan that is allowing the retailer to continue operating during bankruptcy proceedings. The lawyer said the property had already been pledged as collateral to secure Saks’ payment obligations to Amazon under their partnership.
The deal also faced resistance from Saks’ top luxury brands, according to two sources familiar with their views. Those brands were concerned that selling through a mass-market e-commerce platform could dilute their image.
The sources said it was likely that luxury brands would use the bankruptcy negotiations to push back against the partnership.
