Saks Global seeks bankruptcy protection as challenges hit the luxury sector

Saks Global Files for Bankruptcy Protection

On December 8, 2024, shoppers passed by Saks Fifth Avenue in New York City. The parent company, Saks Global, has now sought bankruptcy protection, marking a significant development in the luxury retail sector.

Late Tuesday, Saks Global—the owner of Saks Fifth Avenue—entered bankruptcy proceedings after facing mounting debt, much of it stemming from its 2024 acquisition of competitor Neiman Marcus.

The company filed for Chapter 11 protection in the Southern District of Texas, becoming the first major retail bankruptcy of 2026.

Leadership at Saks Global has seen rapid changes. In early January, Marc Metrick stepped down as CEO, with executive chairman Richard Baker taking over. However, less than two weeks later, Baker also exited the CEO role.

Shifts in American shopping habits have posed challenges for established retailers. Many consumers have become dissatisfied with the luxury sector, citing rising prices and declining product quality. Increasingly, luxury shoppers are bypassing department stores and purchasing directly from brands.

Economic uncertainty has further complicated matters. Over the past year, consumer confidence has dropped, the job market has slowed, and a majority of Americans blame the administration for economic woes, according to a recent poll.

In a statement, Saks Global said it had voluntarily filed for Chapter 11 to support its ongoing transformation, with backing from key financial partners.

As part of the restructuring, Richard Baker will step down as CEO, and Geoffroy van Raemdonck, previously head of Neiman Marcus, will lead the company through the bankruptcy process.

“This is a pivotal time for Saks Global, offering us a chance to reinforce our business and prepare for the future,” van Raemdonck stated.

“Working closely with our new leadership and team members, we are committed to guiding the company through this transition while continuing to serve our customers and partner brands. I am eager to help shape the next chapter for Saks Global and ensure our ongoing influence in luxury retail.”

Saks Global was created through a 2024 acquisition by HBC, which purchased Neiman Marcus for $2.65 billion. The aim was to build a luxury powerhouse capable of negotiating better deals with brands and drawing shoppers back to stores.

However, Saks reportedly struggled to pay vendors on time for months, straining supplier relationships and fueling speculation about a potential bankruptcy well before the official filing.

Financial Support and Next Steps

In its Wednesday announcement, Saks Global revealed it had secured $1 billion in debtor-in-possession financing to maintain operations and support its turnaround. Additionally, bondholders have committed another $500 million in funding once the company emerges from bankruptcy.

This article has been updated with new details.

For more news and updates, sign up at CNN.com.