Amazon says Saks’ investment is worthless after bankruptcy

Amazon He wants a federal judge to reject Saks Global’s bankruptcy financing plan, writing in court papers that the beleaguered store “burned hundreds of millions of dollars in less than a year” and failed to put their deal on hold.

When Saks acquired Neiman Marcus for $2.7 billion in December 2024, Amazon invested $475 million in the venture with the understanding that the retailer would begin selling its products on Amazon’s website and the technology company would provide technological and logistical expertise.

“The stock investment is now worthless,” Amazon lawyers wrote in a filing on Wednesday, hours after Saks filed for Chapter 11 bankruptcy protection. “Saks has consistently failed to meet its budgets, spent hundreds of millions of dollars in less than a year, and accumulated hundreds of millions of additional dollars in unpaid invoices owed to its retail partners.”

As part of the deal, Saks launched a “Saks at Amazon” branded storefront on the e-commerce company’s website featuring a collection of luxury fashion and beauty products. It also agreed to pay a referral fee for Saks-branded goods sold on the platform, ensuring payments of at least $900 million to Amazon over eight years.

Amazon said in its filing that Saks’s bankruptcy financing plan harms the company and other creditors because it burdens parts of Saks with new debt that it did not previously have. It also pushes Amazon further back on reimbursements, reducing the amount that can be paid during the proceedings, the e-commerce company said in filings.

Amazon wrote that it “hopes” Saks will resolve its concerns, but if not, it may “seek more radical solutions” including appointing an examiner or conservator.

During a hearing Wednesday in U.S. Bankruptcy Court in Houston, Judge Alfredo Perez allowed Saks to begin tapping new $1.75 billion in bankruptcy financing after the company said it would face immediate liquidation without it. He has not yet issued a ruling on Amazon’s request.

Saks’ acquisition of Neiman Marcus brought in a slew of new investors, including names from the technology industry. For Amazon, the deal ensured Saks’s presence in its sprawling online store, as the company sought to attract larger brands and grow its luxury collection, in particular.

The Saks deal also raised the prospect of Amazon deepening its investment in the department store chain. Amazon has been determined to have a bigger presence in physical retail, and has tried many concepts over the years, scrapping some along the way.

The company has also entered into similar investment agreements in the past. In 2022, Amazon acquired a 2% stake in Grubhub in exchange for the food delivery company adding perks for Prime members. Amazon expanded its stake in the company to up to 18% in 2024.

Amazon declined to comment beyond what was stated in the file. Sachs did not immediately respond to a request for comment.

Software giant Sales force It also became a minority shareholder in Saks during its acquisition of Neiman Marcus, but took a smaller stake than Amazon did. It is unclear whether it also plans to object to the bankruptcy plan.