Saks Global Enterprises is fighting to hold on to two leases that Simon Property Group wants terminated at New York and California locations.
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Saks Global claims that closing the operations at the Stanford Shopping Center in Palo Alto, California, and a Saks Off Fifth discount store in Woodbury, New York, would block the opportunity to sell the leases to raise money for its creditors, Bloomberg reported.
“Simon has decided that it can make more money on certain of the Leases by reletting them at higher rates,” according to the response filed within the Texas Southern Bankruptcy Court. “That fact is the root of the instant dispute; not any genuine defect in performance by the Global Debtors.”
Simon and Saks Global did not respond to requests for comment.
Saks, which owns Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman, announced its bankruptcy filing and its plans to close nearly all of its Saks Off 5th discount locations in January. The move came after not being able to cover its debt service costs.
A few days later, Simon, which invested $100M to support Saks’ acquisition of Neiman Marcus in December 2024, asked bankruptcy court Judge Alfredo Perez to approve the termination of two leases.
The mall giant claimed that it moved to terminate the leases prior to Saks Global receiving court protection and that the retailer is behind on $7M in rent and other fees.
But Saks is pushing back, claiming that its agreements allow time to catch up on rent payments and that it has Chapter 11 bankruptcy protection, which would keep Simon from interfering with its business, according to the filing.
A group of Saks Global senior note holders and the committee that represents the unsecured creditors lined up to support blocking the lease terminations, according to the filings.
The filing stated that the court should be "reluctant" to terminate the leases as the two locations are important to the operations, brand presence and overall enterprise value.
Simon isn’t the only mall landlord Saks Global is fighting off.
Aventura Fashion Island, Brixmor Park Shore and GGP Retail, formerly Brookfield, are among the mall landlords demanding payment of rent, Retail Dive reported.
The big-box luxury retailer allegedly owes up to $19M in unpaid lease obligations between the date Saks filed bankruptcy on Jan. 13 and the end of that month.
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