Saks Global has entered Chapter 11 bankruptcy protection, the company announced on Wednesday, in a fresh shock to a global luxury industry still struggling to emerge from a severe downturn.
The immediate cause of the filing was a $100 million interest payment due on Dec. 30. The department store operator said it had considered various options to generate liquidity before concluding that restructuring with debtor-in-possession financing would be the most viable path to survival.
In a statement, the company said it had entered voluntary Chapter 11 with support from key financial stakeholders, and that it has secured $1.75 billion in financing, with $1.5 billion from a group of senior secured bondholders and approximately $240 million in incremental liquidity from asset-based lenders. The company noted that all stores and e-commerce will remain open.
“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,” Geoffroy van Raemdonck, who has been named chief executive of the luxury retailer after previous CEO Richard Baker stepped down this week, said in a statement.
Saks’ filing is the latest and largest in a string of bankruptcies by luxury retailers that have left the industry reeling and forced some small brands to shut down. Matchesfashion’ abrupt closure in March 2024 left many labels out significant sums and with inventory inaccessible in the online retailer’s warehouses. Ssense and Luisaviaroma, both still working through their own bankruptcy processes, owe millions of dollars to hundreds of brands.
The ripple effects of Saks Global’s bankruptcy has the potential to dwarf those other retailers’ troubles. The company is by far the biggest pure luxury multibrand retailer in the US, with more than 60 stores between Saks Fifth Avenue and Neiman Marcus, and projected $10 billion in annual revenue. While some labels have stopped shipping to Saks and Neiman Marcus over the last few seasons amid declining sales and unpredictable payments, many still rely on them for a significant volume of their business.
“It’s really the whole food chain in retail that’s affected by this,” said Gary Wassner, chief executive of Hilldun Corporation, a firm that helps designers finance large production orders for retailers. Hilldun works with 140-some clients that are stocked at Saks, Neiman or Bergdorf as of late December, some relying on the retailers for 40 percent or more of their revenue.
“Nobody can replace Saks,” he added
What Went Wrong
It was only a year ago that HBC, formerly Hudson’s Bay Company, the retail holding firm owned by real estate magnate Richard Baker, completed its acquisition of Neiman Marcus, combining it and Bergdorf Goodman with Saks Fifth Avenue. The $2.7 billion deal included Amazon and the licensing giant Authentic Brands Group as investors.
The combined company, rebranded as Saks Global, intended to use its scale to address the thorny problems that had eroded the once-dominant position of America’s department stores in the retail landscape. Chief among them: online competition, a turn away from wholesale by European luxury conglomerates, and most recently, a decline in luxury spending.
From the start, Saks Global was hamstrung by cash flow issues and its debt. Combined, Saks Fifth Avenue and Neiman Marcus accumulated $4.7 billion in total debt as of the second quarter of 2025. Much of that carried over from previous buyouts of both companies, but Saks’ parent also raised $2.2 billion in bonds to acquire Neiman Marcus, tapping into investor demand in the high-yield credit market around the narrative of a luxury turnaround in 2025 and millions of dollars in synergistic savings from the merger.
“The way I see it, the Neiman Marcus sale was a gasp for air because of the leverage that each one of them had,” said David Tawil, a distressed assets expert. “Both of them were headed toward restructuring anyway, so the idea was that they would buy some time and allow for an opportunity for a turnaround … or for the market to change.”
The market did not change, or at least, not fast enough. Most major luxury brands reported sales declines over much of 2025, with early signs of a turnaround coming only in the final months of the year.
For Saks, any hopes of reviving the department store model also ran up against fraught relationships with vendors. Brands had complained of late or missing payments from Saks Fifth Avenue since 2023. The situation came to a head in February, when Saks Global promised to make vendors whole, but on terms that only exacerbated tensions. Industry operators said the lack of trust touched off a feedback loop where patchy assortments depressed sales. In the second quarter, sales declined 11 percent to $1.6 billion, with the company citing inventory issues as a primary cause.
Saks Global’s relationship with its creditors rapidly deteriorated over the course of the year as well. The company repeatedly sought to renegotiate terms with its lenders. In June, a group of creditors agreed to issue new debt and restructure its existing loans. By Dec. 19, some bonds traded at 6 cents on the dollar, and the more senior debt, which would receive payouts first in a bankruptcy, traded at 48 cents.
By then, Saks was exploring options for restructuring, tapping law firm Willkie Farr to advise on seeking a debtor-in-possession lender and Chapter 11 filing, according to sources familiar with the matter. In November, the company announced it was exploring selling a 49 percent stake in Bergdorf Goodman, seeking $1 billion as a means of “de-levering” the business, according to Baker.
Longtime Saks chief executive Marc Metrick exited the company earlier this month.
What Happens Next
Vendors already frustrated by late payments now face the stark reality of trying to collect via the bankruptcy process, where they will be near the back of the line. Typically brands are in the category of unsecured creditors, meaning that they are paid only after bank lenders. Often, they recover little or nothing of what they are owed.
Even then, many brands still can’t afford to walk away. Saks, Neiman Marcus and Bergdorf Goodman remain open while the company negotiates with creditors. Some vendors may continue shipping on tighter terms or demand cash in advance to preserve a critical revenue stream, while others could scale back deliveries or exit altogether.
In a worst-case scenario, creditors would be unable to agree on a restructuring plan or a sale under Chapter 11, forcing Saks Global to liquidate. Stores would be wound down, inventory sold off and vendor claims pushed even further down the priority list. Fashion has seen this before: Barneys New York’s bankruptcy ultimately ended in liquidation in 2020, leaving many designers with unpaid invoices.
What happened to Barneys and Matches remains rare. Typically, retailers emerge from bankruptcy with lighter debt loads, though often under new ownership and often with radically different ideas about the path forward.
It’s too early to say what form that could take at Saks. When Saks Global was formed, the retailer entered a joint venture with Authentic Brands Group to lend its expertise in helping the licensing giant expand its luxury brands into hospitality and other sectors. The involvement of Amazon is another wild card; Saks already lists some products on the e-commerce giant’s marketplace, though many luxury brands that sell in Saks and Neiman Marcus stores refuse to participate in that partnership. Amazon could play other roles behind the scenes, however, such as handling Saks’ logistics.
Some of Saks’ competitors have also demonstrated that the department store model still has life in it. Bloomingdale’s and Nordstrom, and online multibrand retailers Mytheresa, Shopbop and FWRD are growing sales (often at Saks’ expense), and to varying degrees are making progress in rebuilding relationships with vendors, reducing discounting and increasing margins.
But in other ways, Saks Global was luxury department stores’ last hope for survival. For years, the world’s most powerful luxury brands had been undermining wholesale by investing heavily in their own retail and digital channels, siphoning off customers from third-party retailers. Tariff uncertainty raised costs across supply chains and complicated pricing for retailers with limited room to absorb them.
Yet the desire for multibrand shopping has not disappeared: Shoppers still value curation, human interaction and the experience of encountering new brands in a single, trusted environment. If the sector is to survive, it may need to be rebuilt from the ground up.
Stay tuned to BoF for updates on this developing story.
