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The high-end department store conglomerate Saks Global filed for bankruptcy protection on Tuesday in one of the largest retail collapses since the pandemic, 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 Wednesday its stores would remain open for now after it finalised a $1.75bn financing package and appointed a new CEO.
The former Neiman Marcus CEO Geoffroy van Raemdonck will replace 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 $1bn to $10bn in assets and liabilities, according to documents filed in US bankruptcy court in Houston, Texas.
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 Covid pandemic, as competition from online outlets rose, and brands started more frequently selling items through their own stores.
The new financing deal would provide an immediate cash infusion of $1bn 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 $240m would be available through an asset-backed loan provided by the company’s asset-based lenders, according to the company.
The luxury retailer will have access to $500m of financing from the investor group once it successfully exits bankruptcy protection, expected later this year, the company added.
A host of luxury brands were among the unsecured creditors, led by Chanel and Gucci owner Kering at about $136m and $60m respectively, the court filing said.
The world’s biggest luxury conglomerate, LVMH, was listed as an unsecured creditor at $26m. In total, Saks Global estimated there were between 10,001 and 25,000 creditors.
In 2024, Baker had masterminded the takeover of Neiman Marcus by Canada’s Hudson’s Bay Co, 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.
The $2.7bn deal was built on about $2bn in debt financing and equity contributions from investors including Amazon, Salesforce and Authentic Brands.
Amazon and Authentic Brands were listed in the court filing as equity investors.
