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Saks Global has filed for bankruptcy protection as the US luxury retailer grapples with a bloated debt burden, in the latest department store restructuring.
The retailer filed for Chapter 11 bankruptcy protection late on Tuesday after failing to make a $100mn interest payment to bondholders in December. The process is expected to wipe out the company’s owners, which include new investors such as Amazon and Salesforce.
The debacle has already hit creditors, who just months ago agreed to provide a $600mn financial lifeline by forgiving some of the $2.2bn of debt Saks owed. The fight highlighted how companies played hardball with creditors, exploiting loopholes in their loan contracts to find ways to raise needed capital.
Saks on Wednesday said it had secured financing of $1.75bn, including $1.5bn from senior secured bondholders. It appointed Geoffroy van Raemdonck, former head of rival Neiman Marcus before its acquisition by Saks, as chief executive.
“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.
Saks has struggled since the company and its financial backers acquired Neiman Marcus and Bergdorf Goodman in 2024 for $2.7bn, a debt-fuelled takeover that faltered almost immediately after it was completed. With limited cash on hand and slowing sales of luxury goods, the company attempted to safeguard its liquidity by slowing payments to vendors.
That angered critical suppliers who stock its racks, some of whom refused to send goods to Saks and Neiman, or demanded full payment at delivery, as they feared becoming a creditor in an eventual bankruptcy. The lack of merchandise weighed on sales, exacerbating the company’s difficulties.
Saks is the latest US department store operator to seek bankruptcy protection. Neiman filed to reorganise its debts in 2020 after its failed leveraged buyout by the Canada Pension Plan Investment Board and asset management company Ares, while Barney’s began liquidating its stores in 2019. They followed the demise of Henri Bendel and Lord & Taylor.
The industry, which used to be the principal avenue through which Americans were introduced to designs from European fashion houses, has struggled as big brands opened their own stores throughout the US. Consumers increasingly shopped direct or bought through online retailers.
Saks’ chief executive Marc Metrick, who was charged with leading the Neiman integration, stepped down at the start of January after 30 years with the company. Metrick had started at Saks out of college in 1995, working his way up through the business’s executive training programme.
“This is a hard business, even when times are good, but it is when times are tough that you really learn about your colleagues,” he said in a departure message on LinkedIn.
