Saks Global is selling the land beneath another one of its flagship Neiman Marcus stores as it continues to shed real estate to raise cash and pay off debt.
Saks Global plans to keep operating its roughly 250,000-square-foot Neiman Marcus location at 150 Stockton St. in downtown San Francisco but has sold the site beneath the store. The property sale is part of a leaseback deal, and New York-based Saks Global will keep the Union Square store open, a spokesperson told CoStar News.
“We made the strategic decision to sell the land beneath the Neiman Marcus San Francisco store and enter into a long-term lease with the new owner,” the Saks Global spokesperson said in an email. “This opportunistic real estate transaction does not impact our day-to-day operations. We remain committed to serving our loyal San Francisco customers.”
Saks Global didn’t identify the buyer or disclose the price. The sale of the land beneath the Neiman Marcus store was first reported by the San Francisco Chronicle.
The deal mirrors the company’s action elsewhere in California in December. Saks Global sold the land parcel beneath its Neiman Marcus store at 9700 Wilshire Blvd. in Beverly Hills to Ashkenazy Acquisition Corp. of New York. That store is also expected to remain open.
Saks Global has been revving up real estate sales as it looks to raise cash. The financially strapped company is in talks with creditors about $1 billion in financing for a potential Chapter 11 bankruptcy reorganization filing, according to numerous media reports. Saks Global reportedly missed a December $100 million bond payment, and last Friday CEO Marc Metrick left the company, replaced by Executive Chairman Richard Baker.
Saks Global has been on a quest to make roughly $600 million through real estate transactions, according to S&P Global Ratings. Saks Global was also looking to sell a minority stake in Bergdorf Goodman, according to The Wall Street Journal.
Saks Global’s woes have come to a head roughly a year after HBC, the then-parent of Saks Fifth Avenue, closed on a deal with an enterprise value of $2.7 billion to acquire upscale rival Neiman Marcus and its Bergdorf Goodman stores. That merger created the new company Saks Global, which was envisioned as an upscale retail behemoth. But luxury retail sales have slowed, affecting companies in that sector. Saks also reportedly had trouble making payments to vendors.
Saks Global closed some stores over the past year. In San Francisco, for example, it shuttered a Saks Fifth Avenue at 384 Post St., which is across Union Square from the Neiman Marcus associated with the recent land deal. It also closed a Saks on Worth Avenue in Palm Beach, Florida.
In September, Saks Global sold a Neiman Marcus store in Plano, Texas, for an undisclosed price. That property is slated to close a year from now.
The company also announced last year that it was closing its iconic Neiman Marcus in downtown Dallas that had been in operation for more than a century but then changed its plans after an outcry from local officials. In a turnaround, Saks Global said it would keep the location open past the 2025 holiday season and then work with the city on potential plans for the historic building.
The company has also said it plans to shut about 10 Saks Off Fifth stores early this year.