Exclusive | Saks owner races to raise $1B in financing as CEO steps down: sources
The owner of Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman is currently seeking over $1 billion in rescue funding from both new and existing investors. This urgent need for financing comes at a time when the company’s CEO has announced their resignation, according to sources familiar with the matter.
The luxury retailer is facing significant financial challenges, including a $100 million interest payment to bondholders that was due earlier this week. Additionally, the company has outstanding debts to various vendors, some of whom have not been fully compensated for over a year.
Saks is actively engaged in discussions with potential investors to secure a substantial cash injection to avoid a potential bankruptcy filing. If these talks are unsuccessful, the company may consider debtor-in-possession financing as part of a Chapter 11 reorganization.
Reports of a potential bankruptcy were fueled by the luxury retailer missing an interest payment to bondholders this week. RetailStat indicates that Saks Global has a 30-day grace period for the missed payment.
Meanwhile, Saks Global announced the departure of CEO Marc Metrick after a decade in the role. Metrick will be succeeded by Richard Baker, the company’s executive chairman and former CEO.
In a statement, Metrick expressed pride in his accomplishments at Saks and his role in establishing Saks.com as a leading luxury e-commerce platform. Richard Baker, known for his real estate expertise, will now lead the company.
Saks Global has been exploring various avenues to raise capital, including selling real estate assets and securing investments from bondholders. The company’s merger with Neiman Marcus has coincided with a challenging period for luxury goods demand.
Despite facing financial difficulties, the company remains committed to its position in the luxury retail market. Recent layoffs and strategic asset sales reflect ongoing efforts to navigate the current economic landscape.
Richard Baker expressed gratitude for Marc Metrick’s contributions to Saks and emphasized the company’s focus on growth and transformation amidst economic uncertainties.
