Luxury retailer Saks seeks bankruptcy protection overwhelmed by debt

The privately held Saks Global said its stores will remain open as it restructures company debt, meaning that it will honor the programs it has for customers. Suppliers and employees will be paid, Saks said.

There are about 33 Saks stores and 36 Neiman Marcus locations, according to the company, as well as two Bergdorf Goodman stores and roughly 70 Saks Off 5th discount stores.

“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 Geoffroy van Raemdonck, who took over for CEO and Executive Chairman Richard Baker this week. Baker had assumed control after the company's CEO Marc Metrick, who stepped down earlier this month.

When Saks said that it would buy Neiman Marcus for $2.65 billion in the summer of 2024, the goal was to create a powerhouse in a luxury sector that had grown more fragmented. Online sellers have been siphoning customers, and big name brands had expanded the number of its own stores to sell its goods.

But the acquisition only added to an already onerous debt at Saks as luxury sales weakened. Saks was having trouble paying suppliers before and by last year it began to stretch out payment periods, angering brands and fraying relationships.

The debt-fueled acquisition of Neiman Marcus made bankruptcy a more likely possibility, said Neil Saunders, managing director of GlobalData Retail. But he was surprised by the speed at which it took place.

“Behind the glossy facade the deal was an entanglement of complex financial engineering that made it impossible for the group to execute their stated vision,” Saunders wrote Wednesday.

And it is a difficult environment for retailers like Saks even if it were on firmer financial footing.

Global sales of luxury goods are expected to contract for the second straight year as consumers, anxious about the economy, pare back spending, according to a study by Bain & Co. consultancy released in November.

Hudson’s Bay, Canada’s oldest company, began liquidating all but six of its stores in March 2025. Neiman Marcus entered bankruptcy protection for about four months in 2020 as the coronavirus pandemic spread. Lord & Taylor sought bankruptcy protection in August of that year, then said it would close all of its stores and operate as an online retailer only.

The century-old department store Nordstrom agreed to be taken private in a $6.25 billion deal last year.

Sales at the long-suffering Macy’s have begun to improve under new CEO Tony Spring, but only after he shuttered faltering stores.

There is concern among vendors about Saks and how things will move forward.

“They’re very nervous, very concerned, very worried about spring deliveries for merchandise that they’ve already produced,” said Gary Wassner, CEO of Hilldun Corp., which ensures suppliers get paid for products shipped to retailers. “They weren’t able to complete deliveries on what they had produced for the fourth quarter of (2025), so they’re sitting with that inventory.”

Wassner said Saks Global accounted for 40% to 50% of the business of some of his clients. He said that he told his clients to stop shipping to Saks last month given the uncertainty. His clients have $130 million in spring orders waiting to be delivered to Saks, but they want payment guarantees from Hilldun first.

Saks said that it has financing commitments of $1.5 billion from some of its creditors and another $240 million in “incremental liquidity” from its lenders.

According to the bankruptcy filing, the company listed $1 billion to $10 billion in assets and liabilities. Chanel topped the list of its 30 largest unsecured claims that were not insiders, with an unsecured claim of roughly $136 million. Kering, which owns such brands as Gucci, Saint Laurent and Balenciaga, was ranked No. 2, with an unsecured claim of $59.9 million, according to the documents.

While Americans continue to spend, an extended period of inflation has tipped a wide spectrum of retailers into bankruptcy courts. In recent months, that has included mall staple Claires and the craft store Joann.

Bankruptcies are rising across almost all sectors, according to S&P Global Market Intelligence, which counted 785 last year, marking the third consecutive annual increase and the highest total since 2010. Retailers had the second largest concentration of filings.