Saks Global Bankruptcy Could Put Trophy Real Estate in Play

Saks Global, the owner of Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman, filed for Chapter 11 bankruptcy protection early Wednesday, thrusting the future of dozens of high-profile department stores — and the real estate they occupy — into uncertainty.

The filing makes Saks the most notable department store chain to enter bankruptcy since the pandemic, the Wall Street Journal reported. The collapse comes just over a year after Saks acquired Neiman Marcus in a $2.7 billion deal meant to create a luxury retail heavyweight with enough scale to cut costs and stabilize vendor relationships.

The company operates roughly 33 Saks Fifth Avenue stores, 36 Neiman Marcus locations, two Bergdorf Goodman flagships and about 70 Saks Off 5th discount stores, including overlap in several major markets. Saks said it is evaluating its “operational footprint,” signaling that store closures, lease renegotiations and potential asset sales are likely outcomes of the process.

The combined company buckled under a prolonged slowdown in luxury spending and a heavy debt load. Financial performance deteriorated quickly last year: sales fell 13 percent year-over-year to $1.6 billion for the period ending Aug. 2, while net losses increased to $288 million. Vendor tensions escalated as Saks delayed payments and extended terms, prompting brands to curtail or halt shipments, further squeezing revenue.

Leadership turmoil followed. Longtime CEO Marc Metrick resigned days after the company missed a roughly $100 million debt payment due last month. Executive Chairman Richard Baker briefly stepped in before also stepping aside. Former Neiman Marcus CEO Geoffroy van Raemdonck has since been appointed to guide the company through bankruptcy.

Saks said it has secured about $1.75 billion in financing to fund the restructuring, including $1 billion in debtor-in-possession loans from a bondholder group led by Pentwater Capital and Bracebridge Capital. Asset-based lenders led by Bank of America will release roughly $250 million in credit, and bondholders have committed an additional $500 million in equity financing upon the end of bankruptcy.

Real estate has already been central to Saks Global’s cash scramble. Last month, the company sold the land beneath Neiman Marcus stores in Beverly Hills and San Francisco for roughly $100 million. It has also been marketing a 49 percent stake in Bergdorf Goodman for approximately $1 billion, underscoring the value of its trophy properties even as the retail business falters.

— Holden Walter-Warner