Saks Global files for bankruptcy protection

Saks Global, the parent company behind the 159-year-old department store that has become a destination and icon for luxury fashion, has filed for Chapter 11 bankruptcy protection Wednesday After the pile of unsustainable debt crushed its business.

The company also announced that former Neiman Marcus CEO Geoffroy van Raemdonck will immediately assume the role of CEO, replacing Richard Baker. He has only been in the role for two weeks, but he has been with Saks since it was acquired by the Hudson’s Bay company in 2013 when he was CEO of the Canadian department store.

With Van Raemdonck comes a revamped senior leadership team that includes veterans from Neiman Marcus, which was acquired by Saks Global in 2024. Darcy Bennick, who served as president of Bergdorf Goodman before Saks bought the department store, will assume the role of president and chief commercial officer of Saks Global. Lana Todorovic, former chief merchandising officer at Neiman, has been named head of global brand partnerships.

Prior to filing, Sachs secured $1.75 billion in new financing from a group of the company’s senior secured noteholders and asset-based lenders. The lion’s share, $1 billion, is debtor-in-possession financing that will be used to fund operations while the company is in Chapter 11 while an additional $500 million will be available to the company after it emerges from bankruptcy, which it said it expects to do later this year. Asset-based lenders provided an additional $240 million in additional liquidity.

The influx of new funds comes after Saks struggled to arrange DIP financing, which will be used to keep the business afloat during Chapter 11 proceedings, CNBC previously reported. Without it, Saks faced possible liquidation, which could have spelled the end of one of the most famous department stores in history.

A bankruptcy filing for Saks Global was seen as inevitable for weeks after the company defaulted on interest payments to bondholders late last month. What’s still unclear is what will happen to the company and the nearly 200 doors under its umbrella across Saks’ namesake department stores and its off-price chain, along with Neiman Marcus and Bergdorf Goodman.

The company said in a press release that it is “evaluating its operational footprint” to place its resources where it sees “the greatest long-term potential.” This will likely mean reducing the store fleet in the coming months to reduce the company’s fixed costs.

“This is a defining moment for Saks Global, and the road ahead represents a meaningful opportunity to strengthen the foundation of our business and position it for the future,” CEO Van Raemdonck said in a press release.

“In close partnership with these newly appointed leaders and our colleagues across the organization, we will navigate this process hand-in-hand with a continued focus on serving our customers and luxury brands. I look forward to serving as CEO and continuing to transform the company so that Saks Global continues to play a central role in shaping the future of luxury retail.”

Although it caters to some of the world’s wealthiest shoppers, Saks has been steadily running out of cash and failing to pay some of its bills after it acquired longtime rival Neiman Marcus in 2024 in a $2.7 billion deal financed largely with debt.

However, Saks was struggling to pay its vendors even before its acquisition of Neiman. Through the acquisition, the company received a stream of new money that was supposed to reduce the debt of the combined business and provide it with “significant liquidity,” Sachs said at the time.

The partnership brought in a new slate of deep-pocketed investors from the tech world, including Amazon and Salesforce, and was expected to create a luxury department store powerhouse with an improved cost structure and stronger negotiating power.

Instead, Sachs failed to implement the turnaround that investors relied on. It briefly got better at paying its sellers, but then moved to a 90-day payment period, angering brands who said the terms were too onerous to suit their business and drove them away.

Soon they stopped paying suppliers again, which led to a decline in the assortment and sales.

In the background, Sachs’ debt began trading below its face value, raising questions about the company’s ability to continue operations and make interest payments to bondholders, people familiar with the matter said. Over the summer, it secured $600 million in new financing and sold major real estate assets to raise more money.

While these efforts bought the company some time, they ultimately did not prevent it from declaring bankruptcy.