Saks Global bankruptcy reshapes luxury retail landscape

Saks Global, the parent company of Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman, has filed for Chapter 11 bankruptcy protection, marking a major turning point for the United States’ largest luxury department store group.

The filing, made this week in U.S. Bankruptcy Court in Texas, allows the company to reorganize its finances while keeping stores open during the process. Saks Global secured $1.75 billion in new financing to support operations as it restructures, according to court documents.

The company’s financial troubles stem largely from its debt-heavy acquisition of Neiman Marcus in late 2024, a deal valued at about $2.6 billion. Court filings estimate Saks Global’s assets and liabilities at between $1 billion and $10 billion, with roughly $3.4 billion in total debt tied to the acquisition and subsequent refinancing.

For shoppers, the bankruptcy does not signal an immediate shutdown of stores. Chapter 11 differs from liquidation, meaning Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman will continue operating for now. However, store closures are expected as part of the reorganization, particularly in locations with high lease costs. Saks Global operates about 70 luxury stores across the U.S., along with Saks Off Fifth outlets, roughly half of which may close.

Signs of strain have already been visible. Several Saks Off Fifth locations have shut down, including stores in New York’s tri-state area. Shoppers have also reported low inventory levels at flagship stores, with empty shelves and limited product availability. Industry analysts say this reflects months of reduced shipments from brands that were waiting to be paid amid uncertainty over Saks Global’s finances.

Large luxury houses such as Prada, Dior, and Gucci are expected to remain largely unaffected, as they typically operate concession-based spaces inside department stores and control their own inventory. Smaller and contemporary brands, however, face greater risk. Lawyers representing vendors say some brands are owed anywhere from $50,000 to $10 million, and unsecured creditors often recover only a fraction of what they are owed in bankruptcy proceedings.

Retail experts say the situation highlights broader challenges facing department stores, including the shift toward e-commerce, direct-to-consumer sales, and changing spending habits among middle-income shoppers. While overall U.S. retail sales remain resilient, department store sales have declined over the past year.

Despite the uncertainty, industry observers note that physical retail is unlikely to disappear entirely. Instead, surviving department stores are expected to evolve into fewer, more destination-driven locations, blending shopping with experiences such as dining, events, and exhibitions.

For now, Saks Global’s bankruptcy leaves shoppers watching for possible clearance sales and leaves the fashion industry grappling with the future of a once-dominant retail model.