Saks Global Receives Final Approval for $1 billion Loan After Addressing Vendor Complaints

A US bankruptcy judge on Friday gave final approval to Saks Global’s bankruptcy financing, which provides $1 billion in new funding to the company, after Saks reached deals with luxury brand vendors that ​had ⁠raised concerns about goods shipped to the retailer before it ⁠went bankrupt.

Saks received initial pushback on its bankruptcy financing from brands such as Dolce & Gabbana, as ​well as landlords and Amazon.com, which had partnered with Saks on an online sales platform. But the company resolved ​those objections before a Friday ⁠court hearing in Houston.

With most of the objections resolved earlier, ⁠US Bankruptcy Judge Alfredo Perez approved the financing at the court hearing.

Many ‌of the vendors had raised ​concerns that the bankruptcy loan could allow Saks’ lenders to claim collateral ⁠rights to millions of dollars in luxury handbags, clothing and ‌jewelry that the luxury brands had sent to ​Saks ‌on consignment. Saks and the lenders resolved those concerns and agreed ‌that the inventory provided on consignment ⁠was ⁠not Saks’ property.

The vendors’ contracts with the retailer allowed them to continue to own the inventory until it is sold, even while it sits on Saks’ shelves. This arrangement ​is common in luxury retail, where labels operate mini boutiques ⁠inside ‌department stores and supply goods on ​concession ‌or consignment.

By Dietrich Knauth. Editor: Rod Nickel.

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