Saks Global says its bondholders have approved its five-year business plan to emerge from bankruptcy, including moves to dramatically downsize its store footprint.
The New York-based luxury retail conglomerate — parent of Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman — on Monday said another $300 million of its $1.75 million in bankruptcy financing had been released by an ad hoc group of its senior secured bondholders.
That additional tranche of capital will provide the luxury giant with sufficient liquidity to continue to support operations and to "advance its transformation as it focuses on serving luxury customers, strengthening brand partner relationships and driving full-price selling," according Saks Global.
The company, saddled with the debt stemming from its $2.7 billion purchase of the Neiman Marcus Group in December 2024, filed for bankruptcy protection in January. Since then, it has slashed its brick-and-mortar footprint. It closed about 60 of its off-price Saks Off 5th locations and announced the closing 20 Saks Fifth Avenue and four Neiman Marcus stores.
Saks Global said it expects to file a detailed reorganization plan with the U.S. Bankruptcy Court for the Southern District of Texas within the next several weeks. Then Judge Alfredo Perez will have to review and approve it.
The company on Monday cited the progress it had made optimizing its Saks Fifth Avenue and Neiman Marcus store portfolio, saying it was "creating a more productive footprint comprising the best-performing and most desirable locations in markets with a high concentration of luxury customers."
The company also pointed out a sharpened focus on luxury and full-price products "by streamlining Saks Global's off-price business to 12 locations" that serve as a selling channel for residual inventory from Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman.
Streamlining the supply chain
Saks Global also reported it has slimmed down its supply chain network, "prioritizing three go-forward distribution and service-center facilities in Texas, Pennsylvania and California, which have been significantly invested in over recent years, to support faster shipping, improve the customer experience and drive cost efficiencies."
Finally, Saks Global said it had repaired some of its relationships with vendors, many of whom had balked and stopped shipping merchandise after not getting paid prior to the Chapter 11 filing. The fence-mending has resulted in "a significant acceleration of inventory flow, with shipping resumed by nearly 600 brands releasing $1.4 billion in retail receipts," according to Saks Global.
That's led to a nearly 60% increase in merchandise receipts in March month-to-date versus the same period last year, Saks Global said.
"We have made significant progress over the past two months as we work to position Saks Global for the future, quickly stabilizing our business, improving inventory flow and investing in our transformation," Geoffroy van Raemdonck, CEO of Saks Global, said in a statement.
"With continued strong support from our capital partners, we are laying the path to realize the combined full potential of our three banners, achieve double-digit adjusted" earnings before interest, taxes and amortization, he said.
For the record
Willkie Farr & Gallagher and Haynes and Boone are serving as legal counsel, PJT Partners is serving as investment banker, Berkeley Research Group is serving as financial adviser, and C Street Advisory Group is serving as strategic communications adviser to Saks Global.
Paul, Weiss, Rifkind, Wharton & Garrison is serving as legal counsel, Lazard Frères & Co. is serving as investment banker, FTI Consulting is serving as financial adviser, and Kekst CNC is serving as strategic communications adviser to the ad hoc group.