Saks Global, the parent company of Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman, is racing to land more than $1B in rescue financing from new and existing investors to pay off debts, or the company may face bankruptcy.
Here's what we know about the developing situation:
- The company's CEO Marc Metrick stepped down and has been replaced by Richard Baker, the execute chairman of Saks Global.
- Saks missed an interest payment on its debt last week, of which it has a lot.
- The company accumulated a ton of debt following its $2.7B acquisition of Neiman Marcus Group in 2024 and has since struggled to revive sales since the deal closed. The deal was financed by $2.2B worth of junk bonds, which S&P Global called “unsustainable.”
- Debts include a $100M interest payment to bondholders that came due last week. Plus millions to vendors, many of whom have not been paid in full for more than a year.
- In August, Saks completed a debt structuring to take some pressure off its finances and strengthen its balance sheet, but that might not prove to be enough.
- Last month, Saks sold its Neiman Marcus property in Beverly Hills to an investment firm for an undisclosed sum to free up more cash. Moves like this are eventually what led to Red Lobster's demise.
- In early December, Hilldun Corp., which acts as a guarantor or insurer for brands and represents about 140 brands that sell to Saks, said it would no longer back shipments to retailer.
All this happening while consumers simultaneously decreased their spending on luxury goods over economic uncertainty led to the perfect storm for Saks Global.
If talks with investors fail, and Saks is unable to raise the funds to cover its debts, the next logical steps for the company would be Chapter 11 Bankruptcy to restructure. A source told The Post that discussions with investors will likely wrap up within a couple of weeks.
As you might recall, Amazon and Salesforce are investors in Saks Global and helped fund the Neiman Marcus deal, which in turn created the Saks Global holdings company. I'm curious to see if / how they play a role in the potential rescue financing and future of the company.