Macy’s Inc. has a once-in-a-lifetime opportunity to make a win out of Saks’ woes.
On Wednesday, Saks Global Enterprises, the company that combines Saks Fifth Avenue, Neiman Marcus and the operations of Bergdorf Goodman, filed for Chapter 11 bankruptcy. It’s the culmination of a sorry saga that began 18 months ago when Saks’ owner, backed by Amazon.com Inc. and Salesforce Inc., bought Neiman Marcus to give the combined company more clout with the big luxury brands.
The implications of the failure — Saks has secured about $1.75 billion in financing to continue to trade — will be felt across the retail landscape, including by suppliers to the department store chain, who are owed millions of dollars. But Macy’s, which owns Saks’ rival Bloomingdale’s, is likely to be one of the few to benefit.
Tony Spring, a seasoned merchant who became Macy’s chief executive officer two years ago, has already begun to turn around the storied department store. Now, he should seize the moment to expand and elevate Bloomingdale’s, which — with Saks likely to be a shadow of its former self — could become the premier luxury department store in the US.
Arguably, Bloomingdale’s has already been gaining from Saks’ problems, which began almost as soon as the Neiman deal closed, when the debt taken on to fund the $2.65 billion transaction left Saks struggling to pay suppliers and secure enough stock. Add a downturn in the luxury market, and even an extra $600 million added to its coffers through a complex debt restructuring last summer wasn’t enough to bolster its balance sheet.
Meanwhile, Bloomingdale’s revenue steadily rose in 2025, with the fiscal third quarter delivering a 9 percent increase in same-store sales, the best result in 13 quarters.
As Saks has struggled, Spring has stepped up efforts to better serve Bloomingdale’s upmarket customers. He has been able to attract a wider range of appealing high-end brands, including Victoria Beckham, Toteme, Christian Louboutin and Roger Vivier. For the holidays, Bloomingdale’s partnered with British luxury company Burberry Group Plc, wrapping the facade of its 59th Street flagship in Manhattan with a giant illuminated scarf. If Spring can continue to create this kind immersive experience — there was also a pop-up shop fashioned like a British cottage and exclusive products — he can bring the retailer closer to one of the world’s leading department stores, London’s Selfridges.
Macy’s has a solid balance sheet. Net debt excluding store leases is about $2 billion, while the real-estate value of its stores, even without a tenant in place, could be close to $6 billion, roughly the same as its market capitalisation, according to Mary Ross Gilbert, an analyst at Bloomberg Intelligence. Spring would be wise to communicate that strength to fashion brands to encourage them to ship their most in-demand products — and perhaps some exclusive lines — to Bloomingdale’s.
The CEO is also looking to expand the department store, particularly in its more compact format. If, as is likely, Saks’ restructuring involves shop closures, that could be an opportunity to pick up some prime locations.
Beauty brands, too, will be affected by what happens to Saks. I’ve argued that Macy’s should take advantage of high beauty valuations to offload Bluemercury. But the cosmetics and fragrance retailer has also been adding brands, and if it can capture business that would have gone to Saks, it could become a grown-up alternative to LVMH Moet Hennessy Louis Vuitton SE’s Sephora. That would make holding onto the unit more compelling.
In the past, I would have been skeptical that Macy’s could take advantage of the turmoil. In its core chain, the retailer has been good at coming up with new initiatives, such as smaller “Market” stores and a dedicated department for millennials. But it never saw the plans through. However, Spring seems to be succeeding with his “Bold New Chapter” strategic blueprint. In addition to the growth at Bloomingdale’s, there are signs of stabilisation at Macy’s, where he has been closing underperforming units and revamping those left standing with more exciting merchandise, extra staff and improved customer service.
Macy’s stock touched $24 in December, around the level that a consortium of would-be buyers proposed in 2024 and its highest level in three years.
Still, it won’t be easy.
Saks’ store closures could mean deep discounts at locations to be shuttered, disrupting the overall luxury retail market. It’s also possible that a muscular buyer, such as Amazon or Bernard Arnault swoops in for some prime assets — perhaps Bergdorf Goodman, which would complete the LVMH founder and CEO’s colonisation of Fifth Avenue around 57th Street. Meanwhile, British retail entrepreneur Mike Ashley’s Frasers Group Plc bought a majority stake in US luxury department store chain The Webster. Might Ashley, who loves both real estate and a flutter, be tempted by some iconic US names?
If Saks emerges from bankruptcy protection with fewer stores and liabilities, it would be a more formidable competitor. Indeed, it has appointed former Neiman CEO Geoffroy van Raemdonck to evaluate its business and invest where there is most long-term potential. And Macy’s won’t have a monopoly when it comes to capitalising on the shake-up. Rival Nordstrom, which was taken private last year, has also been winning market share, according to Bloomberg Intelligence, while the big luxury brands may use Saks’ bankruptcy to take even more control of sales through their own stores and websites.
At the other end of the spectrum is off-price retailer TJX Cos Inc. It has a stronger balance sheet than Macy’s, and could use some of its $1.8 billion of net cash excluding store leases to hoover up either inventory from Saks or its suppliers. TJ Maxx has been quietly adding more upscale names, such as France’s APC and haircare products from Olaplex Holdings Inc., and some customers might be tempted to shop there for designer clothing, bags and beauty instead of going to a department store.
Even so, Macy’s, thanks to Bloomingdale’s, probably has the edge. The Saks saga has reinforced the belief that department stores are doomed dinosaurs. Its great rival still has a chance to prove that wrong.
By Andrea Felsted
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