Saks Global is shedding bad debt and emerging from bankruptcy with a high-end focus and a new name, Exemplar Luxury Group.
Five months after declaring Chapter 11 bankruptcy, the parent company of Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman has emerged with a smaller footprint, less debt, a new ownership structure and a promise from CEO Geoffroy van Raemdonck to be “guided by our relentless devotion to our customers.”
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The reincorporated luxury retail group reduced its debt by nearly 75% through the bankruptcy, Exemplar said Friday. The company, which cut its footprint by two-thirds to 49 locations, secured an extra $500M in financing as part of the bankruptcy, The Associated Press reported.
Saks had 33 Saks Fifth Avenue locations, 36 Neiman Marcus stores, two Bergdorf Goodman locations and around 70 Saks Off 5th discount locations when it filed for bankruptcy.
Its reorganization plan from the beginning included a pivot to focus on high-end shoppers, including the closure of 58 Saks Off 5th stores, according to the AP. Saks also closed 18 Saks Fifth Avenue locations and three Neiman Marcus stores as part of the reorganization.
Exemplar's new seven-person board includes two representatives each from the creditors that led a group that offered a $1B debtor-in-possession financing package to Saks after it went bankrupt: Boston-based Bracebridge Capital and Naples, Florida-based Pentwater Capital Management.
Van Raemdonck will serve on the board, along with Dave Kimbell, a former Ulta Beauty CEO, and Philippe Schaus, who has been on the executive committee of luxury conglomerate LVMH for more than a decade.
Many of the now-shuttered Saks locations were quickly picked up by expanding discount brands. Burlington offered $22M to take over 22 Saks Off 5th locations after the brand’s parent company put 59 leases up for auction in March. Ross also took over two leases in California and one in New Jersey.
Saks’ bankruptcy was snagged by objections from Amazon, one of its major lenders, and Simon Property Group, one of its top landlords. Amazon objected in an effort to prevent all of Saks’ bankruptcy claims being rolled into a single case, a move that would have pushed Amazon further down the creditor stack.
The e-commerce behemoth provided $475M in preferred equity in 2024 to fund Saks’ takeover of Neiman Marcus in a $2.7B, debt-laden deal that ultimately weighed down the retailer.
As part of the bankruptcy proceedings, Amazon was fighting to keep that debt tied to the corporate entity that owned Saks’ flagship store in New York City, not the retailer itself, to avoid falling behind other claims against the retailer.
Simon and Saks went to court after the mall REIT tried to take over two locations following the bankruptcy, claiming that the retailer was behind on rent, while Saks claimed that shuttering the stores would complicate the sale of the leases. The two sides settled in April in a deal that let the stores temporarily stay open.
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