Saks Parent Company Enters Chapter 11 Bankruptcy Following Missed Payment
Evercore ISI senior managing director breaks down his price targets for Amazon and Expedia on ‘Varney & Co.’
Saks’ parent company, Saks Global Enterprises, has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Texas. This move follows the company’s failure to make a $100 million interest payment in December, contributing to its growing debt obligations.
In a bid to stabilize its operations during the restructuring process, Saks Global announced on Wednesday that it has secured a financing commitment of approximately $1.75 billion. This funding is backed by senior secured bondholders and asset-based lenders.
Effective immediately, the company has appointed Geoffroy van Raemdonck as its new chief executive officer. Despite the bankruptcy filing, Saks Fifth Avenue, Neiman Marcus, Bergdorf Goodman, Saks OFF 5TH, Last Call, and Horchow will continue their store and e-commerce operations.
LUXURY RETAIL GIANT SAKS WEIGHS BANKRUPTCY FILING, REPORT
Pedestrians pass by Saks Fifth Avenue Department store in New York City. (Victor J. Blue/Getty Images / Getty Images)
This strategic move aims to strengthen Saks’ business and enhance its competitiveness against online luxury rivals and major players like Nordstrom and Bloomingdale’s. “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. He emphasized the importance of collaboration with newly appointed leaders and colleagues to navigate this challenging process while maintaining a focus on customer service and luxury brands.
After missing the debt payment, Saks had only 30 days to rectify the situation or face a formal default that could lead to bankruptcy, according to Tim Hynes, Global Head of Credit Research at financial intelligence firm Debtwire.
The bankruptcy filing comes about a year after Canada-based conglomerate Hudson’s Bay Co. completed its $2.7 billion acquisition of Neiman Marcus Group in December 2024, aiming to build a larger luxury retail platform under the newly formed Saks Global Enterprises brand.
An entrance to Saks Fifth Avenue inside the Galleria Tuesday, July 30, 2013, in Houston. (James Nielsen/Houston Chronicle via Getty Images / Getty Images)
Saks Fifth Avenue’s parent company gained ownership of Neiman Marcus and Bergdorf Goodman while spinning off its U.S. luxury assets. Richard Baker, Saks Global Executive Chairman, described the deal as a “transformative moment for Saks Global and the luxury retail industry,” creating “an unparalleled multi-brand luxury portfolio with tremendous growth potential.” However, to finance the acquisition, Saks took on approximately $2.2 billion in debt.
SAKS FIFTH AVENUE SHUTTING DOWN SAN FRANCISCO LOCATION AFTER NEARLY 45 YEARS
Hynes noted that the deal relied on aggressive earnings and cost-cut assumptions that have not materialized, making it difficult to sustain the added leverage in a shrinking retail sector. Additionally, the trend of pushing customers to buy directly from standalone stores and websites has negatively impacted larger department stores like Saks and Neiman.
FILE PHOTO: Holiday shoppers walk outside the Saks Fifth Avenue flagship store in Manhattan in New York City, Dec. 5, 2023. (REUTERS/Mike Segar/File Photo / Reuters Photos)
Hynes observed that the company was already facing cash shortages as it approached the critical holiday shopping season, which limited inventory levels and hindered any near-term recovery efforts. While asset sales, such as the recent sale of the Los Angeles Neiman Marcus flagship, may provide temporary relief, they are not a sustainable long-term solution.
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As part of its restructuring efforts, Saks may need to renegotiate leases due in the new year, raising questions about the future of its iconic Fifth Avenue flagship store.
Shoppers at the Saks Fifth Avenue flagship store in Manhattan in New York City, Jan. 6, 2026. (REUTERS/Angelina Katsanis / Reuters Photos)
“While it may survive an initial restructuring, the highest value for that land is certainly not as a retail store,” Hynes concluded.
Reuters contributed to this report.
Evercore ISI senior managing director breaks down his price targets for Amazon and Expedia on ‘Varney & Co.’
Saks’ parent company, Saks Global Enterprises, has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Texas. This move follows the company’s failure to make a $100 million interest payment in December, contributing to its growing debt obligations.
In a bid to stabilize its operations during the restructuring process, Saks Global announced on Wednesday that it has secured a financing commitment of approximately $1.75 billion. This funding is backed by senior secured bondholders and asset-based lenders.
Effective immediately, the company has appointed Geoffroy van Raemdonck as its new chief executive officer. Despite the bankruptcy filing, Saks Fifth Avenue, Neiman Marcus, Bergdorf Goodman, Saks OFF 5TH, Last Call, and Horchow will continue their store and e-commerce operations.
LUXURY RETAIL GIANT SAKS WEIGHS BANKRUPTCY FILING, REPORT
Pedestrians pass by Saks Fifth Avenue Department store in New York City. (Victor J. Blue/Getty Images / Getty Images)
This strategic move aims to strengthen Saks’ business and enhance its competitiveness against online luxury rivals and major players like Nordstrom and Bloomingdale’s. “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. He emphasized the importance of collaboration with newly appointed leaders and colleagues to navigate this challenging process while maintaining a focus on customer service and luxury brands.
After missing the debt payment, Saks had only 30 days to rectify the situation or face a formal default that could lead to bankruptcy, according to Tim Hynes, Global Head of Credit Research at financial intelligence firm Debtwire.
The bankruptcy filing comes about a year after Canada-based conglomerate Hudson’s Bay Co. completed its $2.7 billion acquisition of Neiman Marcus Group in December 2024, aiming to build a larger luxury retail platform under the newly formed Saks Global Enterprises brand.
An entrance to Saks Fifth Avenue inside the Galleria Tuesday, July 30, 2013, in Houston. (James Nielsen/Houston Chronicle via Getty Images / Getty Images)
Saks Fifth Avenue’s parent company gained ownership of Neiman Marcus and Bergdorf Goodman while spinning off its U.S. luxury assets. Richard Baker, Saks Global Executive Chairman, described the deal as a “transformative moment for Saks Global and the luxury retail industry,” creating “an unparalleled multi-brand luxury portfolio with tremendous growth potential.” However, to finance the acquisition, Saks took on approximately $2.2 billion in debt.
SAKS FIFTH AVENUE SHUTTING DOWN SAN FRANCISCO LOCATION AFTER NEARLY 45 YEARS
Hynes noted that the deal relied on aggressive earnings and cost-cut assumptions that have not materialized, making it difficult to sustain the added leverage in a shrinking retail sector. Additionally, the trend of pushing customers to buy directly from standalone stores and websites has negatively impacted larger department stores like Saks and Neiman.
FILE PHOTO: Holiday shoppers walk outside the Saks Fifth Avenue flagship store in Manhattan in New York City, Dec. 5, 2023. (REUTERS/Mike Segar/File Photo / Reuters Photos)
Hynes observed that the company was already facing cash shortages as it approached the critical holiday shopping season, which limited inventory levels and hindered any near-term recovery efforts. While asset sales, such as the recent sale of the Los Angeles Neiman Marcus flagship, may provide temporary relief, they are not a sustainable long-term solution.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
As part of its restructuring efforts, Saks may need to renegotiate leases due in the new year, raising questions about the future of its iconic Fifth Avenue flagship store.
Shoppers at the Saks Fifth Avenue flagship store in Manhattan in New York City, Jan. 6, 2026. (REUTERS/Angelina Katsanis / Reuters Photos)
“While it may survive an initial restructuring, the highest value for that land is certainly not as a retail store,” Hynes concluded.
Reuters contributed to this report.
