Saks Global files for bankruptcy after Neiman Marcus takeover leads to financial collapse

NEW YORK - High-end department store conglomerate Saks Global has filed for bankruptcy protection in one of the largest retail collapses since the Covid-19 pandemic.

It comes barely a year after a deal that brought Saks Fifth Avenue, Bergdorf Goodman and Neiman Marcus under the same roof.

The move cast uncertainty over the future of US luxury fashion, though the retailer said early on Jan 14 that its stores would remain open for now after it finalised a US$1.75 billion (S$2.3 billion) financing package and appointed a new chief executive officer.

Former Neiman Marcus CEO Geoffroy van Raemdonck will replace Mr 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 US$1 billion to US$10 billion in assets and liabilities, according to court documents.

The court process is meant to give the luxury retailer room to negotiate a debt restructuring with creditors or sell itself to a new owner to stave off liquidation. Failing that, the company may be forced to shutter.

A retailer long loved by the rich and famous, from Gary Cooper to Grace Kelly, Saks fell on hard times after the pandemic, as competition from online outlets rose, and brands started selling items through their own stores more frequently.

The new financing deal would provide an immediate cash infusion of US$1 billion through a debtor-in-possession loan from an investor group, Saks Global said. Reuters earlier reported the loan was led by Pentwater Capital Management in Naples, Florida, and Boston-based Bracebridge Capital.

Financing worth US$240 million would be available through an asset-backed loan provided by the company’s asset-based lenders, according to Saks Global. The luxury retailer will have access to US$500 million of financing from the investor group once it successfully exits bankruptcy protection, expected later in 2026, the company added.

A host of luxury brands were among the unsecured creditors, led by Chanel and Gucci owner Kering at about US$136 million and US$60 million, respectively, the court filing said. The world’s biggest luxury conglomerate, LVMH, was listed as an unsecured creditor at US$26 million. In total, Saks Global estimated that there were between 10,001 and 25,000 creditors.

In 2024, Mr Baker had masterminded the takeover of Neiman Marcus by Canada’s Hudson’s Bay, which had owned Saks since 2013, and later spun off the US luxury assets to create Saks Global, bringing together three names that have defined American high fashion for over a century. REUTERS