Saks Global Files for Chapter 11, Citing Inventory Pressures

Saks Global filed for Chapter 11 bankruptcy protection on Tuesday in the US Bankruptcy Court for the Southern District of Texas, following an extended period of financial distress. The luxury retail group was formed through the US$2.7 billion merger of Saks Fifth Avenue, Bergdorf Goodman, and Neiman Marcus in late 2024.

In its filing, the company reported estimated assets and liabilities ranging between US$1 billion and US$10 billion, with approximately US$3.4 billion in pre-petition funded debt. Geoffroy van Raemdonck, former chief executive of Neiman Marcus Group, was appointed CEO effective immediately, succeeding Richard Baker, who stepped down from his executive roles on Jan. 13.

Financing and Operational Continuity

To support operations during the court-supervised restructuring, Saks Global secured a US$1.75 billion financing package. The commitment includes US$1.5 billion from an ad hoc group of senior secured bondholders and US$240 million in incremental liquidity from asset-based lenders. Upon exiting bankruptcy, the company expects access to an additional US$500 million in financing.

The retailer said all physical stores and e-commerce platforms, including Saks OFF 5TH, Last Call, and Horchow, will continue operating throughout the process. Management said the company’s difficulties stem primarily from inventory constraints and weakened vendor confidence, rather than a collapse in consumer demand for luxury goods.

The filing lists between 10,001 and 25,000 creditors. The largest unsecured claims include major luxury fashion groups:

• Chanel Limited: US$136 million

• Kering S.A. (Gucci): US$60 million

• Rosen-X: US$41 million

• Capri Holdings: US$33 million

• LVMH: US$26 million

Analysts say the merger left the group highly leveraged amid an industry shift toward direct-to-consumer sales models. Brittain Ladd, a strategy and supply chain consultant, said the consolidation failed to translate scale into sustainable liquidity.

In court filings, Saks Global reiterated that its challenges are tied to inventory availability and vendor confidence, not underlying demand for luxury merchandise. The restructuring is intended to renegotiate costly leases and stabilize supplier relationships to restore inventory levels across the company’s 159-year retail platform.

Ahead of the Chapter 11 filing, Saks Global Enterprises secured bridge financing in preparation for bankruptcy after reportedly missing a US$100 million interest payment due Dec. 30. The company is seeking a forbearance agreement with creditors.

The proposed capital structure includes a debtor-in-possession (DIP) facility with at least US$750 million in new funding, incorporating a roll-up of existing debt to sustain operations during the reorganization. The liquidity crunch follows declining sales and persistent inventory pressures, compounded by a US$4.7 billion debt burden largely tied to the 2024 Neiman Marcus acquisition.