Late Tuesday, Saks Global, parent of Saks Fifth Avenue, filed for Chapter 11 protection in the US Bankruptcy Court for the Southern District of Texas. The move follows heavy debt from its $2.65 billion purchase of Neiman Marcus and shifting consumer habits away from department stores.
In early January, CEO Marc Metrick resigned and executive chairman Richard Baker briefly took over. Baker left within two weeks and the company named former Neiman Marcus chief Geoffroy van Raemdonck to lead restructuring.
Van Raemdonck said “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. In close partnership with these newly appointed leaders and our colleagues across the organization, we will navigate this process together with a continued focus on serving our customers and luxury brands. I look forward to serving as CEO and continuing to transform the Company so that Saks Global continues to play a central role in shaping the future of luxury retail.”
Shoppers now often buy directly from luxury brands, reducing traffic at department stores. Vendors reported late payments and some stopped shipping merchandise, worsening inventory shortages.
Ragini Bhalla of Creditsafe shared DBT data and said “Saks Inc.’s Days Beyond Terms (DBT) data over the past twelve months reveals a persistent and troubling pattern of late payments that point to sustained cash flow distress. DBT measures how many days late a company pays its bills. Throughout the entire year, Saks’ DBT has hovered well above the industry average of 10-12 days, ranging from a low of 27 in November 2024 to a high of 41 in January 2025 and March 2025.”
The company secured $1 billion in debtor-in-possession financing to fund operations. A bondholder group has agreed to provide an additional $500 million when the company emerges.
Glenn McMahon, managing partner at MAC Advisory and Consulting, said “I’m in the camp that bankruptcy is inevitable, and I think it’s a desired outcome — they could close non-performing locations well in advance of the lease expiring.”
