Saks Global is set to exit bankruptcy protection this summer, thanks to a $500 million financing deal from a group of bondholders to support its luxury store operations, the company shared on Thursday.
Owners of Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman, mentioned they’ve secured “restructuring support agreements” with several bondholders. They aim to assure merchants that they will be compensated for goods sold to these upscale department stores.
Specifics about the agreement haven’t been made public.
After Saks Global filed for bankruptcy on January 14, around 650 vendors who had left due to unpaid wages have resumed business with the stores, according to the company.
In the meantime, Saks has been focused on trimming costs, which involves closing unprofitable locations and reducing its workforce by approximately 1,200 employees.
The Saks Fifth Avenue brand has faced considerable negative impacts from store closures, with 20 locations expected to shut down and only 13 remaining open. Meanwhile, most Saks Off Fifth stores have also closed.
Saks Global intends to keep 32 luxury stores operational, including one that was nearly closed at the Westchester Mall in White Plains, New York, but was ultimately saved. Plans to shut down a Saks Fifth Avenue store in Sarasota, Florida, along with another in Palm Desert, California, have also been canceled.
Saks Global’s CEO, Geoffroy van Raemdonk, described the bondholder financing as a “significant milestone,” anticipating that it will provide necessary funds once the company exits bankruptcy.
This arrangement “highlights the progress we’ve achieved in our transformation and reflects our capital partners’ trust in our future vision,” he added.
The $500 million will supplement a $1.7 billion debtor loan that Saks Global secured from lenders, allowing operations to continue while addressing substantial debt.
Following the acquisition of Neiman Marcus in 2024, the company took on over $4 billion in debt linked to a $2.7 billion deal.
Sarah Foss, who oversees legal and restructuring matters at Debtwire, stated that the $500 million infusion is a “key achievement” as the company moves out of bankruptcy.
A full restructuring plan is expected to be proposed by April 24, she noted.
Saks still faces significant challenges on the road to financial stability.
In February, the retailer sold merchandise worth about $336 million but reported a loss of $77 million after expenses, according to court documents.
Despite these challenges, Saks Global mentioned that the fresh inventory from vendors has led to “increased customer engagement,” with shoppers spending 6% more per visit compared to the same time last year.
