The proprietor of Saks Fifth Avenue is in search of chapter safety, buffeted by rising competitors and the large debt it took on to purchase its rival within the luxurious sector, Neiman Marcus, simply over a 12 months in the past.
Saks International has secured roughly $1.75 billion in financing, the New York firm mentioned as filed for Chapter 11 chapter Wednesday within the Southern District of Texas.
The personal firm mentioned that shops will stay open because it restructures firm debt, which means that it’ll honor the applications it has for patrons. Suppliers and staff shall be paid, Saks mentioned.
“It is a defining second for Saks International, and the trail forward presents a significant alternative to strengthen the inspiration of our enterprise and place it for the long run,” mentioned Geoffroy van Raemdonck, who took over for CEO and Govt Chairman Richard Baker this week. Baker had assumed management after the corporate’s CEO Marc Metrick, stepped down earlier this month.
When Saks mentioned that it would purchase Neiman Marcus for $2.65 billion in the summertime of 2024, the purpose was to create a powerhouse in a luxurious sector that had grown extra fragmented. On-line sellers have been siphoning clients and massive title manufacturers had begun to promote items from their very own shops.
However the tie-up with Nieman Marcus solely worsened Saks’ debt scenario as luxurious gross sales weakened.
International gross sales of luxurious items are anticipated to contract for the second straight 12 months in 2026 as customers anxious concerning the international economic system pare again their spending, based on a research by Bain & Co. consultancy launched in November.
Hudson’s Bay, Canada’s oldest firm, started liquidating all however six of its shops in March 2025.
The upscale division retailer panorama has risky in recent times.
Neiman Marcus entered chapter safety for about 4 months in 2020 because the coronavirus pandemic unfold. The privately held division retailer chain was pressured to shut its shops for a number of months through the pandemic like different opponents reminiscent of Lord & Taylor.
Lord & Taylor sought chapter safety in August of that 12 months, then mentioned it could shut all of its shops and function as a web-based retailer solely.
The century-old division retailer Nordstrom agreed to be taken personal by Nordstrom members of the family and a Mexican retail group in a $6.25 billion deal final 12 months.
Gross sales on the long-suffering Macy’s have begun to enhance underneath new CEO Tony Spring, who has shuttered unprofitable shops and improved service. He’s additionally attempting to draw the identical luxurious consumers who energy gross sales at Bloomingdale’s and upscale magnificence retailer Bluemercury, that are each owned by Macy’s.
There may be concern amongst distributors about Saks and the way issues will transfer ahead.
“They’re very nervous, very involved, very anxious about spring deliveries for merchandise that they’ve already produced,” mentioned Gary Wassner, CEO of Hilldun Corp., which ensures suppliers receives a commission for merchandise shipped to retailers. “They weren’t capable of full deliveries on what they’d produced for the fourth quarter of (20)25, so that they’re sitting with that stock.”
Wassner mentioned Saks International accounted for 40% to 50% of the enterprise of a few of his shoppers. He mentioned that he advised his shoppers to cease delivery to Saks final month given the uncertainty.
Saks mentioned that it has financing commitments of $1.5 billion from a few of its collectors and one other $240 million in “incremental liquidity” from its lenders.
