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Saks’ parent company, Saks Global Enterprises, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Texas on Tuesday after missing $100 million in interest payments in December, adding to mounting debts.
Following the filing, Saks Global announced Wednesday that it had secured a financing commitment of approximately $1.75 billion, backed by senior secured bondholders and asset-based lenders, to support operations during the restructuring.
The company has also appointed Geoffroy van Raemdonck as chief executive officer, effective immediately.
It said stores and e-commerce operations at Saks Fifth Avenue, Neiman Marcus, Bergdorf Goodman, Saks OFF 5TH, Last Call and Horchow would remain open.
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Pedestrians walk past the Saks Fifth Avenue department store in New York. (Victor J. Blue/Getty Images / Getty Images)
This was seen as a strategic move by Saks to strengthen its business and better compete with online luxury rivals and major players like Nordstrom and Bloomingdale’s.
“This is a defining moment for Saks Global, and the road ahead presents a significant opportunity to strengthen the foundations of our business and position it for the future,” van Raemdonck said. “In close partnership with these newly appointed leaders and our colleagues across the organization, 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.
After missing the debt payment, the company had just 30 days to make payment or face a formal default that could lead to bankruptcy, according to Tim Hynes, global head of credit research at financial intelligence firm Debtwire.
The bankruptcy filing comes about a year after Canadian conglomerate Hudson’s Bay Co., which has owned Saks since 2013, completed its roughly $2.7 billion acquisition of Neiman Marcus Group in December 2024 to build a larger luxury retail platform under the new Saks Global Enterprises brand.
An entrance to Saks Fifth Avenue inside the Galleria on Tuesday, July 30, 2013, in Houston. (James Nielsen/Houston Chronicle via Getty Images / Getty Images)
The parent company of Saks Fifth Avenue became the owner of Neiman Marcus and Bergdorf Goodman and spun off its U.S. luxury assets.
Richard Baker, executive chairman of Saks Global, said the deal marked a “transformational moment for Saks Global and the luxury retail sector” as it created “an unprecedented multi-brand luxury portfolio with enormous growth potential.”
However, in order to finance the acquisition, Saks took on approximately $2.2 billion in debt.
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“The deal was based on aggressive profit and cost reduction assumptions that were not realized, while the additional leverage proved difficult to maintain in a structurally declining retail sector,” Hynes said.
Compounding the problems, companies also increasingly pushed customers to buy directly from their own standalone stores and websites, directly hurting department stores like Saks and Neiman.
FILE PHOTO: Holiday shoppers stroll past the Saks Fifth Avenue flagship store in Manhattan in New York, December 5, 2023. (REUTERS/Mike Segar/File photo / Reuters Photos)
Hynes said it was evident the company was already short on cash heading into the critical holiday shopping period, “limiting inventory levels and jeopardizing any near-term turnaround.”
He also noted that while asset sales, like the recent sale of flagship Neiman Marcus in Los Angeles, may provide temporary relief, they are not a long-term solution.
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As part of its restructuring, the company may need to focus on renegotiating expiring leases in the new year, calling into question the future of its iconic Fifth Avenue flagship.
Customers at the Saks Fifth Avenue flagship store in Manhattan, New York on January 6, 2026. (Reuters/Angelina Katsanis / Reuters Photos)
“While it may survive some initial restructuring, the highest value of this land is certainly not as a retail store,” Haynes said.
Reuters contributed to this report.
