Maybe, just maybe, the U.S. isn’t building a K-shaped economy after all. You need two strong arms to support a bifurcated marketplace, and the latest evidence suggests the lower tier may be supporting the entire retail economy.
Specialty retail, except running, is suffering, department stores are closing ever more doors and now, the crown jewel, Saks Global (Saks), the parent of Saks Fifth Avenue, Neiman Marcus, Bergdorf Goodman, and Off 5th, has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Texas (Court), taken down by the company’s ill-fated attempt to save the Neiman Marcus brand from its own demise.
The company had struggled with a heavy debt load following its acquisition of Neiman Marcus. Even before the Neiman deal in 2024, Saks was feared to be in a tenuous financial position, and the merger of the two luxury brands failed to yield sufficient operational and cost efficiencies to offset the company’s massive debt load.
DIP Financing
Saks Global has secured a financing commitment of approximately $1.75 billion, comprising $1.5 billion from an ad hoc group of the company’s senior secured bondholders and approximately $240 million of incremental liquidity from the company’s asset-based lenders. The company said in its statement that the financing package is expected to strengthen its balance sheet and “position it for a strong and stable future,” while it continues to provide customers with unparalleled multi-brand luxury shopping experiences.
Upon Court approval, the $1 billion of debtor-in-possession financing from the Ad Hoc Group is expected to provide ample liquidity to fund Saks Global’s operations and turnaround initiatives. The Ad Hoc Group has also committed $500 million in financing to be available to Saks upon its emergence from Chapter 11, expected later this year.
An Evolving Leadership Team
As previously reported by SGB Media (see below), CEO Marc Metrick exited the company in early January 2025, handing the reins to Saks Global Executive Chairman Richard Baker. Now, Baker is out as the company enters bankruptcy proceedings, and former Neiman Marcus CEO Geoffroy van Raemdonck will guide the company through the Chapter 11 process.
Confused yet?
“This is a defining moment for Saks Global, and the path ahead presents a meaningful opportunity to strengthen the foundation of our business and position it for the future,” said van Raemdonck in a Saks statement.
“Geoffroy has a proven track record of driving transformative growth at Neiman Marcus Group and other brands, building trusted relationships within these organizations and throughout the industry. His leadership will help advance the Company’s focus on stability and long-term value creation,” said Paul Aronzon, member of the Saks Global Board of Directors. “We also want to thank Richard, who was a visionary leader during his tenure at Saks Global. We are grateful for his contributions and wish him continued success in the future.”
Saks reported that van Raemdonck is expanding the company’s senior leadership team by appointing industry veterans and former Neiman Marcus Group leaders to help right the ship. Darcy Penick has been named president and chief commercial officer, overseeing Stores, Marketing, Buying, Digital, Analytics, and Customer Care. Lana Todorovich has been named chief of Global Brand Partnerships, leading the luxury retailer’s enterprise-level efforts with brand partners, according to a company statement.
“In close partnership with these newly appointed leaders and our colleagues across the organization, we will navigate this process together with a continued focus on serving our customers and luxury brands,” van Raemdonck commented. “I look forward to serving as CEO and continuing to transform the company so that Saks Global continues to play a central role in shaping the future of luxury retail.”
Path Forward
As part of Chapter 11, Saks Global is reviewing its operations to invest in areas where it sees the greatest long-term potential. The company wants to focus on areas where luxury retail brands can achieve sustainable growth.
Saks Global is also seeking relief through a number of customary “first day” motions with the Court to facilitate a smooth transition into Chapter 11 and operate in the ordinary course. These motions, which Saks Global expects to be approved in short order, include requests to honor all customer programs, make go-forward payments to vendors and continue employee payroll and benefits.
Market watchers believe Saks Fifth Avenue and Neiman Marcus will be pared down, while Bergdorf Goodman could be sold off.
Advisors
Willkie Farr & Gallagher LLP and Haynes and Boone, LLP are serving as legal counsel, PJT Partners LP is serving as investment banker, Berkeley Research Group is serving as financial advisor, and C Street Advisory Group is serving as strategic communications advisor to the Company.
Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal counsel, Lazard Frères & Co, LLC is serving as investment banker, FTI Consulting, Inc. is serving as financial advisor, and Kekst CNC is serving as strategic communications advisor to the Ad Hoc Group.
Image courtesy Saks Fifth Avenue/Saks Global
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See below for SGB Media’s recent coverage of the Saks Global business.
Saks Global’s CEO Steps Down as it Reportedly Prepares for Bankruptcy
Report: Saks Global Prepares for Bankruptcy Following Missed Debt Payment
