Saks Global is preparing to file for Chapter 11 bankruptcy within days after missing an interest payment of more than $100 million tied to the debt it took on to acquire Neiman Marcus in 2024, according to a report by the Wall Street Journal. The company is now in discussions with creditors to secure debtor-in-possession financing to support the bankruptcy process. Saks declined to comment.

The expected filing would mark the most high-profile U.S. department-store bankruptcy since the Covid-19 pandemic and underscores the mounting pressures facing legacy luxury retailers. Since the merger, Saks has struggled under a heavy debt burden amid a broader slowdown in luxury spending. Financial strain has been compounded by delays in paying vendors, prompting some suppliers to hold back shipments. That has weakened merchandise assortments, hurt sales, and further eroded confidence among brands.

In an effort to shore up liquidity, Saks has pursued asset sales, including a Beverly Hills property, and explored selling a 49% stake in Bergdorf Goodman, which was acquired as part of the $2.7 billion Neiman Marcus deal. The company also raised $600 million from bondholders in June to meet a prior debt obligation, but the relief proved temporary as operating conditions continued to deteriorate.

The combined business—including Saks Fifth Avenue, Neiman Marcus, Bergdorf Goodman and Saks OFF 5th—was intended to create a luxury retail powerhouse capable of cutting costs and retaining affluent shoppers. Instead, the debt-fueled strategy has faltered. Sales for the quarter ended Aug. 2 fell more than 13% year over year to $1.6 billion, missing internal expectations, while net losses widened to $288 million.

Vendor relations have further strained operations. Earlier this year, Saks sought to reassure suppliers by promising to settle overdue payments in installments, but it drew backlash after extending payment terms on new orders to 90 days from the traditional 60. The uncertainty has hurt Saks’ competitive standing against rivals such as Nordstrom and Bloomingdale’s, and pushed the value of its bonds to new lows late last year.