Saks Global bankruptcy exposes fragility of US luxury retail

The bankruptcy of Saks Global—parent of Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman—has thrown the future of America’s remaining luxury department store giants into doubt, just over a year after their much-heralded merger.

Court filings show Saks Global entered Chapter 11 protection after unpaid obligations to suppliers ballooned into the hundreds of millions of dollars. Major luxury brands including Chanel, Kering, Richemont, LVMH, and Zegna were among those listed as unsecured creditors, with total trade payables spanning several pages of the filing.

The collapse followed weeks of efforts by executive chairman Richard Baker to stabilize the business. After failing to secure fresh capital from equity partners and lenders, the company sold prime real estate under Neiman Marcus stores in Beverly Hills and San Francisco for about $100 million—insufficient to restore supplier confidence or inventory flow.

Saks Global has since secured roughly $1.75 billion in financing to support restructuring. Bondholders have taken control and installed a new leadership team led by former Neiman Marcus chief executive Geoffroy van Raemdonck, replacing Baker.

The merger of Saks and Neiman Marcus in late 2024 was intended to create a luxury retail powerhouse with stronger negotiating leverage, operational synergies, and cost savings estimated at $600 million. While some efficiencies were realized, the group was hit by a broader slowdown in luxury demand, inflationary pressures, and tariffs. As suppliers curtailed shipments due to unpaid bills, inventory shortages worsened, reducing sales and borrowing capacity under asset-backed loans.

Financial disclosures show that for the three months ending August 2, 2025, Saks Global’s revenue fell 13% year-on-year to $1.6 billion, while net losses widened to $288 million. Inventory levels in the second half of 2025 were about $550 million below forecasts, further constraining operations during the critical holiday period.

The filing underscores structural challenges facing department stores as luxury brands increasingly sell directly to consumers online and through their own boutiques. While Saks, Neiman Marcus, and Bergdorf Goodman once served as gateways to European luxury for American shoppers, their role has diminished amid shifting consumer behavior and digital competition.

Under Chapter 11, stores will continue operating as the company restructures its balance sheet, renegotiates obligations, and evaluates its store footprint. Creditors are expected to pursue a sale once restructuring is completed, marking another turning point for a sector long struggling to adapt to a changing retail landscape.