Luxury retail conglomerate Saks Global Enterprises, parent company of iconic department stores including Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman, has filed for bankruptcy protection in the United States, citing an overwhelming debt load and declining sales.
The company made a voluntary filing under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas on Wednesday as part of a move to restructure its finances and stabilise operations. This marks one of the most significant retail bankruptcies in the luxury sector in recent years.
Saks Global said it had secured approximately US $ 1.75 billion in financing commitments to support operations during the bankruptcy process. This package is intended to provide near-term liquidity, pay suppliers and safeguard employee payroll and benefits, the company said.
The company estimated its assets and liabilities to be between US $ 1 billion and US $ 10 billion in filings submitted to the court.
The bankruptcy follows a troubled period for the retailer, coming just over a year after its acquisition and integration of Neiman Marcus in a US $ 2.65 billion transaction. Industry analysts said the merger, while intended to create a powerful multi-brand luxury portfolio, significantly increased the group’s debt burden.
Saks Global has also undertaken a leadership overhaul. Former Neiman Marcus Group chief executive Geoffroy van Raemdonck was appointed as the new chief executive, succeeding Richard Baker, who stepped down earlier this month. Van Raemdonck promptly named a senior team that includes Darcy Penick as president and chief commercial officer, and Lana Todorovich as chief of global brand partnerships to support the restructuring effort.
In a statement, van Raemdonck characterised the bankruptcy as a defining moment for the company and said the process presents an opportunity to strengthen the foundation of the business and position it for future growth. He signalled a continued focus on serving customers and luxury brands during the process.
Saks Global said that all of its stores, including those under the Saks Fifth Avenue, Neiman Marcus, Bergdorf Goodman, Saks OFF 5TH, Last Call and Horchow banners, would remain open while the restructuring is underway. The company also said it intends to honour customer programmes and maintain supplier and employee commitments.
The bankruptcy filing underscores broader challenges facing traditional department stores and luxury retailers, including evolving consumer preferences, increased competition from direct-to-consumer brands and a highly leveraged balance sheet following aggressive merger activity.
