Struggling Saks Global Faces Liquidation Threat as Bankruptcy Financing Falters
Saks Global, the parent company of luxury retail icons Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman, is at risk of liquidation as it struggles to secure up to $1 billion in critical bankruptcy financing. According to sources familiar with the matter, the beleaguered retailer has found scant investor interest for a "debtor-in-possession" (DIP) loan, which is essential to fund operations during a potential Chapter 11 reorganization.
Investors are reportedly skeptical that the 159-year-old department store chain can successfully restructure and repay the loan, despite the priority status DIP lenders receive in bankruptcy proceedings. Since Saks missed an interest payment to bondholders in late December, only a "limited number" of specialized distressed-asset or liquidation-focused firms have shown interest, while many others have declined. Without this financing to cover essential costs like payroll, rent, and inventory, the company could be forced into a Chapter 7 liquidation instead of a reorganizing Chapter 11 bankruptcy.
A Downward Spiral Following the Neiman Marcus Merger
Saks's troubles have accelerated since its heavily debt-financed $2.7 billion acquisition of rival Neiman Marcus in 2024. The merger, intended to create a luxury powerhouse with greater scale and cost efficiencies, has instead burdened the company with debt just as the broader luxury market slowed. Operational challenges have mounted, including strained relationships with vendors due to late payments, leading to inventory shortages and declining sales.
The company is already in talks with liquidators to close a number of individual stores, though not yet the entire chain. The potential failure to secure a DIP loan highlights the severe distress facing the retailer. If forced into liquidation, it would mark a stunning fall for one of retail's most storied names, whose flagship Fifth Avenue store is a global luxury destination. The outcome now hinges on whether Saks can convince a handful of specialized investors to bet on its survival in a punishing market environment.
