Saks Global Files for Bankruptcy Protection

Late Tuesday, Saks Global, the luxury department store group, filed for bankruptcy protection, marking one of the most significant retail bankruptcies since the pandemic began.

According to court documents filed in the U.S. Bankruptcy Court in Houston, Texas, Saks Fifth Avenue, which is part of Saks Global, reported assets and liabilities ranging from $1 billion to $10 billion.

As of now, Saks Global hasn’t replied to requests for additional comments.

This situation adds a layer of uncertainty to the landscape of American luxury fashion, especially coming just a year after Saks Fifth Avenue, Bergdorf Goodman, and Neiman Marcus were brought under the same corporate umbrella.

Saks has a long-standing reputation, often frequented by celebrities like Gary Cooper and Grace Kelly. However, it has faced challenges post-pandemic, primarily due to competition from online retailers and brands opting to sell directly in their stores more often.

According to sources familiar with the negotiations, Saks Global is nearing completion of a $1.75 billion financing deal with creditors that is intended to keep its stores operational. This financing includes a significant cash influx of $1 billion through debtor-in-possession financing from a group led by Pentwater Capital Management, based in Naples, Florida, and Bracebridge Capital from Boston.

Moreover, an additional $250 million will be accessible through asset-backed loans arranged by the company’s banks.

If all goes as planned, and Saks Global manages to emerge from bankruptcy protection, there could be potential for raising another $500 million from investors.

Among the unsecured creditors are high-profile luxury brands, with Kering, the owner of Chanel and Gucci, leading with about $136 million and $60 million owed, respectively. LVMH, the largest luxury conglomerate worldwide, is also listed as an unsecured creditor for $26 million. Saks Global estimates that there are between 10,001 and 25,000 total creditors involved.

In 2024, the parent company Hudson’s Bay merged with Neiman Marcus, forming the entity currently known as Saks Global. The $2.7 billion merger was backed by around $2 billion in debt and equity financing from investors like Amazon, Salesforce, and Authentic Brands.

Amazon and Authentic Brands have been noted as equity investors in the bankruptcy court filings.