Saks Global, the parent company of luxury retailer Saks Fifth Avenue, has filed for Chapter 11 bankruptcy protection, marking one of the largest retail collapses since the pandemic. The filing comes after the company struggled with massive debt from its acquisition of rival Neiman Marcus and faced changing consumer habits in the luxury market.
In a move filed late Tuesday in the US Bankruptcy Court for the Southern District of Texas, Saks Global listed assets and liabilities estimated between $1 billion and $10 billion. The company cited the need to restructure its finances and operations to address challenges that have plagued it in recent years, including vendor disputes and operational inefficiencies. This filing positions Saks Global as the first major retailer to enter bankruptcy in 2026, highlighting ongoing turmoil in the department store sector.
The bankruptcy stems largely from the 2024 merger that created Saks Global, which combined Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman under one roof. Intended to create a luxury behemoth, the deal was financed with about $2 billion in debt, burdening the company with high interest payments and strained relationships with key suppliers. Despite initial hopes of leveraging scale to negotiate better terms with brands, Saks Global found itself unable to keep pace with shifting market dynamics and consumer preferences.
Financially, Saks Global has secured $1 billion in debtor-in-possession financing to support its operations during the bankruptcy process. This funding, provided by an investor group led by Pentwater Capital Management and Bracebridge Capital, will allow stores to remain open and maintain inventory levels. An additional $500 million is available upon the company’s emergence from bankruptcy, aimed at facilitating a turnaround and potential restructuring of its retail footprint.
Leadership has been in flux, with Marc Metrick stepping down as CEO in early January, followed by Richard Baker briefly taking the helm before departing. Geoffroy van Raemdonck, former CEO of Neiman Marcus, has been appointed to lead Saks Global through the bankruptcy proceedings, aiming to stabilize the company and rebuild trust with stakeholders. In a statement, van Raemdonck emphasized a focus on customer service and brand partnerships as core to the transformation effort.
Market dynamics have played a key role in Saks’ struggles. Consumers have increasingly shifted to buying luxury goods directly from brands online, bypassing traditional department stores. Moreover, economic uncertainties and consumer dissatisfaction with perceived declines in quality and value have hurt sales across the luxury sector, exacerbated by inflationary pressures and a slowing job market. These trends have eroded the competitive edge that Saks once held in high-end retail.
The implications of this bankruptcy are far-reaching, casting uncertainty over the future of US luxury retail. Major creditors, including Chanel, Gucci owner Kering, and LVMH, are owed tens of millions, and the outcome could affect thousands of employees and numerous vendors tied to the retailer. The filing may trigger further consolidation in the industry, as other retailers grapple with similar challenges of debt and digital disruption.
Looking ahead, Saks Global plans to use the bankruptcy to restructure its debt and operations, with the goal of emerging as a more competitive entity. However, the company faces significant hurdles in a rapidly evolving retail landscape, where adaptability and financial health are crucial for survival. Success will depend on effective execution of its turnaround strategy and the ability to reconnect with luxury shoppers in an increasingly direct-to-consumer world.
