Saks Global Files for Bankruptcy and Appoints New CEO
Buckling under the weight of financial pressures, Saks Global filed for bankruptcy late Tuesday, naming a previous CEO of Neiman Marcus to lead the company. The New York company filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas, according to a statement.
The company secured a financing commitment of about $1.75 billion, comprised in part of $1.5 billion worth of debtor-in-possession financing that will give the company breathing room and “provide ample liquidity to fund Saks Global’s operations and turnaround initiatives,” it said in a statement.
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Investors include an ad hoc group of senior secured bondholders, and approximately $240 million of incremental liquidity from the asset-based lenders.
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New Leadership
With the announcement, Saks Global said Geoffroy van Raemdonck, who led Neiman Marcus before it was acquired by Saks Global, has been appointed CEO, effective immediately. He takes over for Richard Baker, who also held the title of executive chairman and had just been appointed to the top job earlier this month.
Baker came into the CEO position after the company said Marc Metrick – a key player in the acquisition – was stepping down from that role.
“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,” van Raemdonck said in the statement.
Background
Saks Global has been under pressure since its tie-up with Neiman Marcus at the end of 2024 at an enterprise value of $2.7 billion; at the time, the combination was called an “unparalleled multi-brand luxury portfolio.”
But the corporate marriage failed to produced the desired results, despite cost-cutting that included layoffs and other efforts.
By the end of last year, it had failed to make good on a crucial debt payment that led to a debt downgrade, and worsened its fortunes.
Chapter 11 Process
As part of the Chapter 11 process, Saks Global is evaluating “its operational footprint to invest resources where it has the greatest long-term potential,” the statement said. That reflects an effort to focus “where the company’s luxury retail brands are best positioned for sustainable growth,” it said.
Stores and e-commerce experiences across Saks Fifth Avenue, Neiman Marcus, Bergdorf Goodman, Saks OFF 5TH, Last Call and Horchow are open and serving customers, the statement said.
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Leadership Changes
Van Raemdonck is expanding the company’s senior leadership team, appointing industry veterans and former Neiman Marcus leaders.
Darcy Penick has been named president, chief commercial officer, Saks Global, overseeing stores, marketing, buying, digital, analytics and customer care. Lana Todorovich has been named chief of global brand partnerships, Saks Global, leading the luxury retailer’s efforts with brand partners at an enterprise level.
Future of Neiman Marcus
The bankruptcy could stir new concerns about the future of Neiman Marcus and what becomes of its historic downtown Dallas site. The company had decided last year to close it around the end of March — though a last-minute deal staved that off until the holiday shopping season as new ideas for the building were mulled.
In November, Saks Global said the store would stay open past key shopping time as the process to find a new path forward continues with the city. Potential ideas for a new future, discussed around March of last year, included “a luxury retail experience” along with a curated art exhibition and a fashion and event center.
“We remain committed to serving our loyal Dallas customers,” Saks Global said in November.
Challenges in the Retail Industry
But challenges have continued to weigh on the company. In a downgrade of the company recently, a rating agency said “overdue payments resulted in vendors withholding inventory, disrupting Saks Global’s supply chain and leaving it with insufficient in-stock inventory to operate successfully.”
The bankruptcy is another reminder of the stark challenges for a retail industry that’s been buffeted by changing consumer tastes and macroeconomic turbulence.
Some brands have shut down entirely, including Joann, while others have sought Chapter 11 protection, including At Home. Others have shuttered stores, including Macy’s and Kohl’s.
The 0.3% increase in the cost of goods comes after a shutdown that artificially lowered inflation in November.
