Saks Global files for bankruptcy as luxury retail demand softens
Saks Global, the owner of Saks Fifth Avenue, has filed for Chapter 11 bankruptcy protection - a U.S. legal process that allows companies to restructure debt while continuing operations - after struggling with a heavy debt burden following its 2024 acquisition of Neiman Marcus, Qazinform News Agency correspondent reports.
The company said the filing late Tuesday followed mounting financial strain that intensified after the merger with Neiman Marcus, a deal aimed at creating scale in the high-end department store segment. The transaction, valued at $2.65 billion and backed by Saks owner HBC, failed to generate sufficient efficiencies to offset the combined company’s debt load.
The timing also proved challenging. U.S. consumers have increasingly shifted away from traditional department stores, with several legacy retailers reducing their footprints in recent years. At the same time, parts of the luxury market have faced pushback from shoppers over rising prices and concerns about product quality, while brands have expanded direct-to-consumer sales, limiting the role of department stores.
Saks Global also faced liquidity pressures, affecting its ability to pay vendors and straining supplier relationships. In early January, Marc Metrick stepped down as chief executive, and executive chairman Richard Baker briefly assumed the role. Baker has since stepped aside, with former Neiman Marcus chief Geoffroy van Raemdonck appointed to lead the company through the restructuring process.
In a statement, van Raemdonck said the bankruptcy process offers an opportunity to stabilize the business and continue serving customers and partner brands. Retail analysts said the debt-heavy acquisition made a restructuring likely, noting that cash shortages disrupted operations and contributed to declining sales.
The company said it has secured $1 billion in debtor-in-possession financing to support operations during the bankruptcy proceedings, with bondholders agreeing to provide an additional $500 million upon the company’s exit from Chapter 11.
Earlier, Qazinform News Agency reported that the European Commission fined Gucci, Chloé and Loewe more than €157 million in total for fixing resale prices, in violation of EU competition rules.
