Quick Summary
- 1Saks Global has filed for Chapter 11 bankruptcy protection in the Southern District of Texas.
- 2The filing follows a $2.
- 32 billion in high-interest bonds.
- 4The company has struggled with massive interest payments and failed to pay vendors, leading to lawsuits and halted shipments.
Quick Summary
The parent company of some of America's most storied luxury retailers has officially sought bankruptcy protection. Saks Global, which owns the iconic Saks Fifth Avenue department store chain, filed for Chapter 11 bankruptcy on Tuesday.
The filing in the Southern District of Texas marks a dramatic fall for a retail empire that includes legendary names like Neiman Marcus and Bergdorf Goodman. Each of these marquee brands has operated for more than a century, representing the pinnacle of American luxury retail.
The bankruptcy comes after months of financial strain that industry watchers had anticipated. The company's struggles stem from a massive acquisition deal that ultimately left it unable to meet its financial obligations to both bondholders and suppliers.
The Debt Deal
The roots of the current crisis trace back to a transformative acquisition that was meant to strengthen the luxury retailer. In 2024, Saks Global completed a $2.7 billion deal to acquire Neiman Marcus, a move that included strategic investments from technology giants Amazon and Salesforce.
The transaction was designed to create scale and efficiencies across the legacy brands. However, the deal was financed primarily through $2.2 billion in high-interest bonds, creating a heavy debt load that would prove unsustainable.
Instead of strengthening the company's position, the acquisition left Saks Global burdened by hefty interest payments. The financial strain quickly became apparent as the company struggled to generate sufficient cash flow to service its debt obligations.
"They must do something very quickly to rectify this situation in the market, or they will not have a spring season."— Gary Wassner, CEO of Hilldun Corp.
Payment Failures
By February 2025, the company's cash position had deteriorated to the point where it could not meet its obligations to vendors. Then-CEO Marc Metrick informed suppliers that overdue invoices would not be paid until July, and even then, payments would be stretched over a 12-month period.
The situation worsened throughout the year. In June, Saks Global had to restructure six-month-old debt after falling short on a nine-figure interest payment. The company then missed another critical payment of $100 million to bondholders that was due on December 30.
Vendors began refusing to work with the retailer as the holiday season approached. Gary Wassner, CEO of Hilldun Corp., which acts as a guarantor for brands shipping to Saks, issued a stark warning about the company's future.
They must do something very quickly to rectify this situation in the market, or they will not have a spring season.
Hilldun, which works with approximately 140 brands that ship to Saks, had already stopped backing shipments until payments resumed under the agreed terms.
Leadership Changes
As the financial crisis deepened, Saks Global underwent significant leadership changes. Marc Metrick, who had served as CEO and worked with the company for roughly three decades, stepped down in early January.
He was replaced by Richard Baker, who had been serving as executive chairman. The leadership transition occurred as the company faced mounting pressure from multiple fronts: bondholders demanding payment, vendors refusing to ship products, and lawsuits piling up in court.
The timing of the CEO change, just weeks before the bankruptcy filing, signaled the severity of the situation and the urgent need for new direction as the company navigated its financial restructuring.
Legal Challenges
The company's payment problems have spawned multiple lawsuits from frustrated vendors. Suppliers have taken legal action, accusing Saks Global of failing to pay for merchandise that was already sold and delivered to their stores.
One notable lawsuit was filed in October in New York state court by Jovani Fashion, a dressmaker known for creating the popular "Real Housewives of New York" look worn by star Luann de Lesseps. The company alleged that Saks owed it nearly $300,000 for delivered goods.
Saks' attorneys have denied the allegations in court papers, but the lawsuits represent the growing legal fallout from the company's inability to maintain its payment schedules.
Looking Ahead
The Chapter 11 filing initiates a formal restructuring process that will determine the future of these historic retail brands. The bankruptcy protection allows Saks Global to continue operating while it develops a plan to reorganize its finances and address its debt obligations.
The outcome will affect not only the company's employees and executives but also the hundreds of vendors who have supplied these luxury retailers and the customers who have come to expect these brands to remain fixtures in American retail.
The case is being heard in the Southern District of Texas, a venue that has handled numerous major corporate bankruptcies in recent years.
Frequently Asked Questions
Saks Global owns three major luxury retail brands: Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman. All three are century-old department store chains that will be part of the Chapter 11 restructuring process.
The primary cause was a $2.7 billion acquisition of Neiman Marcus financed by $2.2 billion in high-interest bonds. This debt burden created massive interest payments the company could not sustain, leading to missed payments to both bondholders and vendors.
Financial difficulties became apparent in early 2025 when the company announced it couldn't pay vendors until July, with payments spread over 12 months. By June, the company had to restructure debt after missing an interest payment, and it missed another $100 million payment in December.
Vendors have filed lawsuits against Saks Global, including one from Jovani Fashion for nearly $300,000. Some suppliers have stopped shipping to the retailer entirely. The Chapter 11 process will determine how much of what is owed can be paid, typically through a court-approved reorganization plan.
