Iconic Luxury Retailer Saks Files for Bankruptcy amid Struggle with Merger Debt

A 100-year-old retailer is headed to the bargain bin. Saks Global — the parent company behind Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman — has become the latest department store owner to file for Chapter 11 bankruptcy protection. The company said Wednesday that it secured $1.75 billion in financing to keep its store doors open and named a new CEO. 

But whether some fast cash will lead to a long-term recovery for Saks is still being sorted and folded.

Trouble on Fifth Avenue

The writing for Saks was on the dressing room wall. In December, Saks missed an interest payment as part of its debt-fueled merger with Neiman Marcus. Since taking on billions in debt in 2024 to buy Neiman Marcus, Saks piled up past-due bills from vendors and brands, The Wall Street Journal reported. Vendors then withheld their stock, leaving shelves sparse for any shoppers looking for the latest trends. As the department store brand’s stock dwindled, so did its sales. 

Saks follows in the footsteps of one-time rivals such as Barneys New York and Lord & Taylor with the bankruptcy filing, but that doesn’t mean the whole luxury sector is unravelling:

• Luxury sellers like Saks face increased competition from online outlets, including brands’ own direct-to-consumer sites. Prada sales rose for 19 straight quarters as of this fall, driven by Gen Z-fave Miu Miu. Most of its sales come from its own stores and website. (Not to mention, AI was a top topic of discussion at the National Retail Federation’s conference this week in New York, as retailers like Target start letting shoppers check out in ChatGPT.)
• Bloomingdale’s, meanwhile, has bucked the bankruptcy trend for department stores and staved off online competition. Bloomingdale’s and makeup seller Bluemercury boosted sales in the fall quarter for parent company Macy’s, which has opened new stores for both brands and expanded Bloomingdale’s stock of luxury goods. 

Further Off Fifth: Last year, more than 8,000 retail stores shuttered their doors, a 12% jump from 2024, Coresight Research found. If Saks can survive its slump, it will probably slim down its store count. Saks said it is “evaluating its operational footprint,” which includes 33 Saks stores, 70 Saks Off 5th stores and two Bergdorf Goodman locations — plus 36 Neiman Marcus locations. The merger between Neiman Marcus and Saks was meant to create a shopping superpower, but instead may have saddled Saks with extra baggage.