Saks Fifth Avenue parent mulls Chapter 11 bankruptcy: report

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Saks Fifth Avenue Parent Company Considers Bankruptcy

Saks Global, the parent company of luxury department store chain Saks Fifth Avenue, is contemplating Chapter 11 bankruptcy as a final option, according to a report by Bloomberg News. The company is facing a debt payment of over $100 million at the end of the month and is exploring various strategies to increase cash flow, including raising emergency funds or selling assets.

Responding to the report, a spokesperson for Saks Global stated, “We are exploring all potential paths to secure a strong and stable future for Saks Global.”

Saks Global, facing limited options ahead of a more than $100 million debt payment due at the end of this month, is exploring ways to boost cash, including raising emergency funds or selling assets, the report said. AFP via Getty Images

Recent discussions among Saks lenders have focused on the potential need for a debtor-in-possession loan, a type of bankruptcy financing, to address the company’s cash requirements. In September, Reuters reported that Saks Global was considering selling a minority stake in luxury retailer Bergdorf Goodman to reduce its debt burden.

Saks Global has been struggling to stimulate demand in the US amid economic challenges such as inflation and a weakened labor market, resulting in reduced spending on luxury goods. The company was established last year through the acquisition of department store chain Neiman Marcus by Hudson’s Bay Company for $2.65 billion. The merger brought together Saks Fifth Avenue, Neiman Marcus, and other luxury retail and real estate assets to compete with industry giants like Nordstrom and Macy’s.

A man takes a photo of Rockefeller Center in front of Saks Fifth Avenue on Black Friday. — Saks Global was created in July last year by Hudson’s Bay Company after its $2.65 billion acquisition of department store chain Neiman Marcus. AP

During the Neiman Marcus acquisition, HBC utilized funding from shareholders and debt, including a significant contribution from Apollo Global Management. Additionally, the company secured $2 billion in debt financing from Wall Street banks to facilitate the merger.