Saks’ parent company files for Chapter 11 bankruptcy after missing payments
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Saks’ parent company, Saks Global Enterprises, filed for Chapter 11 bankruptcy protection Tuesday in the US Bankruptcy Court for the Southern District of Texas after it missed a $100 million interest payment in December, adding to its growing debt obligations.
After the filing, Saks Global announced Wednesday that it has received a financial commitment of approximately $1.75 billion, backed by senior secured bondholders and asset-backed lenders, to support operations during the restructuring.
The company also named Geoffroy van Raemdonck as CEO, effective immediately.
It said retail and ecommerce operations at all Saks Fifth Avenue, Neiman Marcus, Bergdorf Goodman, Saks OFF 5TH, Last Call and Horchow will remain open.
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Pedestrians walk past the Saks Fifth Avenue Department store in New York City. (Photos by Victor J. Blue/Getty/Getty Images)
It was seen as an important move by Saks to strengthen the business and better compete with online luxury rivals and big players like Nordstrom and Bloomingdale’s.
“This is an important time for Saks Global, and the direction we are going presents a meaningful opportunity to strengthen the foundation of our business and position it for the future,” said van Raemdonck. “Through a close partnership with these newly appointed leaders and our partners across the organization, we will navigate this process with a continued focus on serving our customers and luxury brands. I look forward to serving as CEO and continuing to transform the Company so that Saks Global continues to play an important role in shaping the future of luxury retail.”
After defaulting on the loan, the company had only 30 days to pay or face legal default that could lead to bankruptcy, according to Tim Hynes, Global Head of Credit Research at financial intelligence firm Debbwire.
The bankruptcy filing comes a year after Hudson’s Bay Co. of Canada, which has owned Saks since 2013, completed its purchase of Neiman Marcus Group for an estimated $2.7 billion in December 2024 to create a large high-end retail platform under the newly formed Saks Global Enterprises brand.
An entrance to Saks Fifth Avenue inside the Galleria on Tuesday, July 30, 2013, in Houston. (James Nielsen/Houston Chronicle via Getty Images/Getty Images)
Saks Fifth Avenue’s parent company acquired ownership of Neiman Marcus and Bergdorf Goodman and divested its US luxury brands.
Saks Global Executive Chairman Richard Baker said the deal marks a “transformational time for Saks Global and the luxury retail industry” as it created an “unparalleled multi-brand portfolio with incredible growth potential.”
However, in order to finance the acquisition, Saks took on approximately $2.2 billion in debt.
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“The deal was built on strong earnings and cost-cutting projections that have yet to be met, and additional profits have proven difficult to sustain in a shrinking retail industry,” Hynes said.
To compound the problems, companies have also increasingly pushed customers to buy directly from independent stores and websites, to the detriment of department stores such as Saks and Neiman.
FILE PHOTO: Holiday shoppers walk outside the Saks Fifth Avenue department store in Manhattan in New York City, December 5, 2023. (REUTERS/Mike Segar/File Photo / Reuters Images)
Hynes said it’s clear the company is already cash-strapped as it heads into the critical holiday shopping season, “reducing inventory levels and undermining any near-term turnaround.”
He also noted that while sales, like its recent sale of the Los Angeles Neiman Marcus flagship, may provide temporary relief, they are not a long-term solution.
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As part of its restructuring, the company may have to focus on renegotiating leases due in the new year, with the future of its Fifth Avenue franchise in doubt.
Shoppers at the Saks Fifth Avenue department store in Manhattan in New York City, Jan. 6, 2026. (REUTERS/Angelina Katsanis/Reuters Images)
“Even though you might live in a redevelopment, the highest value of that land is not the same as a retail store,” Haynes said.
Reuters contributed to this report.
