Bankrupt Saks To Close 62 Stores, Go All-In On Luxury Shoppers
Saks Global is closing nearly all Saks Off 5th locations in a strategic pivot to refocus on the company’s luxury roots and emerge from bankruptcy.
The conglomerate that also owns the Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman brands plans to close 57 Saks Off 5th discount stores and focus its operations on luxury sales. A dozen locations will remain open but will sell overstock from the flagship store rather than have a dedicated supply chain, Saks Global announced Thursday.
Saks is also closing all five remaining Last Call stores, which had been Neiman Marcus’ discount outlets. Saks Global said the closures will allow it to sharpen its focus on luxury retail sales.
“We are taking decisive steps to realign our business to better serve our luxury customers and drive full-price selling across our core luxury businesses,” Geoffroy van Raemdonck, the former CEO of Neiman Marcus Group who took over as CEO as part of Saks’ reorganization, said in a statement.
The Saks Off 5th locations slated to stay open are in New York, Florida, New Jersey, Georgia, Texas and California.
Going-out-of-business sales start Saturday at 34 Saks Off 5th locations, and another 23 will close outright Monday.
Saks filed for Chapter 11 bankruptcy on Jan. 14 after running out of cash to cover its debt service costs. Saks has access to $500M worth of a $1.8B financing package led by Pentwater Capital and Bracebridge Capital that the retailer is using to continue operations. But future access to that capital isn’t guaranteed.
Amazon, which invested $475M into Saks in 2024, objected to the plan, arguing that it combined debt from several entities that face different financial circumstances and should be handled separately.
The judge in the Texas bankruptcy court where Saks filed its case gave preliminary approval to the financing plan, but Amazon’s objections will be considered at a hearing in mid-February.
Saks Global is also closing down saksoff5th.com, its discounted online storefront and separate legal entity operating as part of the conglomerate.
The retailer's cash shortage was due in part to its 2024 acquisition of Neiman Marcus in a $2.7B deal that was meant to create a luxury behemoth but instead saddled the newly created Saks Global parent company with debt that it struggled to service.
Amazon was among the investors to fund the acquisition, providing preferred equity that the e-commerce giant says in court filings was backed by the real estate for Saks’ flagship New York store, which itself is covered by a $1.25B CMBS loan.
Saks is looking to combine all of its creditor claims across entities, a move that Amazon argues unjustly pushes it down the debt repayment list. The entities that manage Saks’ real estate are profitable — rent payments cover the CMBS debt service — and Amazon wants to keep its claim against the subsidiary firm separate.
Saks disclosed between $1B and $10B in both assets and liabilities in its initial Chapter 11 filing. Its top 30 creditors have $711M in unsecured claims and include luxury brands like Chanel Ltd., which has the largest claim at $136M, and Kering, the parent company of Gucci and Yves Saint Laurent.
