Saks Global has announced plans to close most of its Saks Off 5TH stores in the U.S., following a recent bankruptcy filing. Specifically, 23 of these stores will shut down on Monday, February 2, while 34 others will remain in operation. As part of this transition, a closing sale will begin this weekend, leaving just 12 stores open in states like New York, Florida, New Jersey, Georgia, California, and Texas.
Geoffroy van Raemdonk, the CEO of Saks Global, commented on this restructuring, saying it aims to better serve luxury customers and increase full-price sales. He mentioned that “These actions will position us well to seize the greatest opportunities for long-term growth and value creation.” The remaining stores are expected to serve mainly as outlets for leftover inventory from Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman.
The retailer’s financial struggles became apparent recently, as they filed for Chapter 11 bankruptcy protection after failing to meet significant interest payments, which led to a debt increase. To assist in its restructuring, Saks has purportedly secured about $1.75 billion in financing commitments from various lenders.
This bankruptcy follows Saks Global’s acquisition of Neiman Marcus Group for $2.7 billion last December, a move intended to create a robust luxury retail platform. In this acquisition, Saks has taken ownership of Neiman Marcus and Bergdorf Goodman while spinning off U.S. luxury assets.
As for online sales, the company also mentioned that its Saks Off 5TH website will begin winding down operations, with a closing sale planned to launch starting Friday, January 30th. Overall, these significant shifts reflect the ongoing challenges faced by luxury retailers as they navigate through a tumultuous economic landscape.
