Saks Fifth Avenue
The luxury department store empire founded on a $2.65B merger now teeters on the brink of collapse. (PHOTO: Saks Fifth Avenue/Facebook)

Saks Global, the luxury retail conglomerate behind Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman, is scrambling to secure up to $1 billion (£745 million) in emergency financing as it teeters on the brink of bankruptcy.

The cash-strapped company missed an interest payment of more than $100 million (£74.45 million) due to bondholders on 31 December, according to the Wall Street Journal. The missed payment has prompted urgent negotiations with creditors and raised serious questions about the future of American luxury retail.

For shoppers accustomed to seeing those iconic labels as symbols of success, there is now a noticeable shift: signs suggest that affluent buyers are tightening their spending, while the corporate borrowing spree that underpinned recent expansion appears to be faltering.

Leadership Upheaval Amid Financial Turmoil

The financial chaos has already claimed its first major casualty at the executive level.

On Friday, Saks Global announced that CEO Marc Metrick, a three-decade veteran of the company, was stepping down 'to pursue new opportunities,' according to a company statement reported by CNBC. Executive Chairman Richard Baker will now assume both the CEO and chairman roles.

'I will work to secure a strong and stable future for our company,' Baker said in the statement. 'Across Saks Global, with our deep industry expertise, well-established relationships within the luxury sector, and talented employees, we will strengthen our position.'

Metrick's sudden departure comes at a crucial juncture. Baker, who orchestrated the $2.65 billion (£1.97 billion) acquisition of Neiman Marcus in July 2024—an event that created Saks Global—now faces the formidable challenge of salvaging a deal that was intended to revolutionise luxury retail.

How the Grand Vision Collapsed

The merger, backed by heavyweight investors including Amazon, Authentic Brands Group, and Salesforce, aimed to forge a luxury powerhouse capable of competing with Nordstrom, Bloomingdale's, and Macy's, according to CNBC.

However, the combined entity has been burdened by approximately $2.2 billion (£1.63 billion) in senior secured notes, alongside an increasingly hostile operating environment.

Rising inflation and a weakening labour market have curbed discretionary spending across the US, hitting luxury goods particularly hard. Saks Global has struggled with sluggish sales and inventory management issues, prompting it to cut its full-year guidance in October after reporting declining revenues.

In August 2025, the company completed a debt restructuring that injected roughly $600 million (£447 million) in fresh capital and reorganised its repayment schedule, according to The Wall Street Journal. Yet, this lifeline proved insufficient.

Selling Off the Crown Jewels

Desperate to bolster cash reserves, Saks Global has been offloading prized assets.

The company has explored selling a minority stake in Bergdorf Goodman, the iconic Manhattan luxury retailer, a Saks Global spokesperson confirmed to Reuters. It has also sold Neiman Marcus properties in Beverly Hills and the land beneath its San Francisco Union Square store, entering into long-term lease-back arrangements with the new owners.

Reports indicate that hundreds of staff have been laid off, shops have shut, and several company buildings fell silent last year. Most Saks Fifth Avenue and Saks Off 5th stores across Canada have closed, with nine more discount outlets expected to shut before the end of 2026.

What Comes Next for Employees and Shoppers?

Saks Global is now negotiating a forbearance agreement with creditors to buy time while it works on securing additional financing or devising a reorganisation plan, Bloomberg reported.

Some bondholders have discussed providing a debtor-in-possession loan that could include at least $750 million (£558 million) in new funding, possibly combined with a roll-up of existing debt to keep the business afloat through Chapter 11 proceedings.

Amid the ongoing uncertainty, workers at Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman await their future. A legacy spanning over a century hangs in the balance. Whether this long-standing retail chain survives depends on the decisions made in the coming weeks. Outcomes remain uncertain, but critical choices are imminent.

Writer's pick