Luxury retailer Saks files Chapter 11

The basics:

• Saks Global files Chapter 11 less than a year after Neiman Marcus acquisition
• Company secures $1B in financing with $500M more planned
• All Saks, Neiman Marcus stores expected to remain open during restructuring
• Geoffroy van Raemdonck named CEO as company begins turnaround process

Less than a year after the parent company of Saks Fifth Avenue acquired its rival Neiman Marcus in a heavily financed $2.7 billion deal, the luxury retailer filed for Chapter 11 bankruptcy protection.

As part of the process underway in U.S. Bankruptcy Court for the Southern District of Texas, New York City-headquartered Saks Global Enterprises said it aims to reposition the existing operational footprint for success.

In a Jan. 14 press release, Saks said it secured a $1 billion financing commitment from an ad hoc group of bondholders and asset-based lenders to fund operations and turnaround efforts.

The same group also pledged an additional $500 million after Saks’ expected emergence from Chapter 11 later this year, the company said.

“This approach reflects an effort to focus the business in areas where the company’s luxury retail brands are best positioned for sustainable growth,” Saks said.

While the reorganization plays out, Saks said its portfolio of stores will remain open. It also expects to continue honoring customer programs, as well as paying suppliers and employees.

NJ presence

Besides Saks Fifth Avenue, the company’s banners of in-store and online brands are Saks OFF 5th, Last Call, Neiman Marcus, Bergdorf Goodman and Horchow.

Within New Jersey, there is a Saks Fifth Avenue location at American Dream in East Rutherford.

Locally, the company also has four of its off-price chain Saks OFF 5th (Bridgewater, Elizabeth, Paramus and Shrewsbury). An outpost in East Hanover is reportedly shuttering this week as part of a larger wave of closures affecting nine locations nationwide.

Saks also named Geoffroy van Raemdonck as its CEO, effective immediately. Van Raemdonck previously served as Neiman Marcus’ CEO prior to its acquisition by Saks in 2024.

The company’s previous top executive, Marc Metrick, stepped down earlier this month. He was succeeded as CEO by Executive Chairman Richard Baker. According to Saks, Baker resigned Jan. 13.

‘A defining moment’

In a statement, van Raemdonck said, “This is a defining moment for Saks Global, and the path ahead presents a meaningful opportunity to strengthen the foundation of our business and position it for the future.”

He went on to express optimism, saying, “We will navigate this process together 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 a central role in shaping the future of luxury retail.”

Saks Global board of directors member Paul Aronzon shared, “Geoffroy has a proven track record driving transformative growth at Neiman Marcus Group and other brands, building trusted relationships within these organizations and throughout the industry. His leadership will help advance the Company’s focus on stability and long-term value creation.”

Luxury market slowdown

Even prior to the Neiman Marcus acquisition, Saks had been struggling with a broader slowdown in the luxury market. As a result, it was delaying payments to vendors for merchandise.

In its petition, Saks listed between $1 billion and $10 billion in assets and liabilities. Creditors with the most unsecured claims include Chanel ($136 million), Kering ($59.9 million) and LVMH ($26 million).

As Americans have shifted their retail habits away from big department stores in recent years, some legacy chains have struggled to keep up, CNN noted. For instance, Macy’s is in the process of closing hundreds of stores as part of a multiyear reset. Lord & Taylor went out of business in 2020.