Saks Global entered into a restructuring support agreement with bondholders who will provide $500 million in exit financing to support plans to exit bankruptcy proceedings this summer.
The parent of Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman filed for Chapter 11 bankruptcy protection in January after it missed a $100 million interest payment in December, burdened by $3.4 billion in debt following its $2.7 billion acquisition of Neiman Marcus.
“Achieving this important milestone underscores the progress we are making on our transformation and reflects our capital partners’ confidence in our go-forward vision, guided by our relentless devotion to the luxury customer,” said Geoffroy van Raemdonck, CEO of Saks Global. “As we advance the restructuring process and position Saks Global for the future, our focus remains on strengthening our brand partner relationships and delivering an expertly curated product assortment and personalized service for our luxury customers across Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman.”
Saks Global said it “continues constructive engagement with its capital partners and other financial stakeholders on a reorganization plan and anticipates its filing in the coming weeks and is focused on establishing the foundation to unlock the combined full potential of its three luxury banners, achieve double-digit adjusted EBITDA margin and drive sustainable growth.”
Additionally, the retailer’s announcement said its “inventory has improved after more than 650 of its brand partners resumed shipping, which has helped lift customer engagement.”
Saks Global announced last month that it had obtained access to an additional $300 million of its $1.75 billion bankruptcy funding package, providing it with “sufficient liquidity to support operations.” A group of its bondholders also approved its five-year business plan.
On February 10, Saks Global announced plans to close eight Saks Fifth Avenue Locations and one Neiman Marcus location. On March 6, it announced the closing of another 10 Saks Fifth Avenue locations and two Neiman Marcus locations.
With the planned closures, Saks Global will have 15 Saks stores remaining nationwide, including its flagship store on Manhattan’s Fifth Avenue. The company will operate 33 Neiman Marcus stores and two Bergdorf Goodman locations.
Image courtesy Saks
