Saks Global, the parent company of luxury retailer Saks Fifth Avenue, filed for Chapter 11 bankruptcy protection late Tuesday.
As reported by the BBC, since the purchase of rival Neiman Marcus in 2024, the company had been struggling with a heavy debt.
Saks was in an unsteady financial situation before its Nieman merger, and the ill-timed acquisition failed to drive enough efficiencies to overcome the company's massive debt load.
The merger failed due to Americans' changed shopping habits, as in recent years they have shifted away from big department stores.
Many shoppers are keeping their distance from the luxury market due to high prices, and those who are still able to afford the goods are buying directly from the brands, cutting out middlemen like department stores.
Moreover, Saks struggled to pay its vendors, and in early January, Marc Metrick stepped down as CEO, reportedly after the company missed a large debt payment. Metrick handed the reins to Richard Baker, the Saks Global executive chairman.
Now Baker is stepping down as CEO, and former Neiman Marcus chief Geoffroy van Raemdonck will assume the post through bankruptcy proceedings.
Saks Global came to be after the 2024 deal to acquire Neiman Marcus for $2.65 billion. The goal was to establish a luxury giant that could take back some control from individual brands, negotiating for lower costs, while also drawing shoppers back to stores.
Instead, Saks reportedly struggled to pay vendors and was worried about a possible bankruptcy months before the retailer filed for protection.
