On a January morning in midtown Manhattan, shoppers browsing the flagship Saks Fifth Avenue store were greeted by gleaming displays of high-end handbags from brands such as Balenciaga and Burberry. Yet behind the polished counters and luxury labels, signs of strain were already visible, reflecting the deep financial troubles now confronting one of America’s most storied department store chains.
Longtime customer Penelope Nam-Stephen, who regularly shops at Saks locations in both New York and Boston, encountered an unexpected problem while searching for a familiar home fragrance at the Diptyque counter. After failing to find the product at the Boston store shortly after Christmas, she hoped the New York flagship would have better stock. Instead, she was told that the shelves were empty. Candles, diffusers and other items in her preferred fragrance were all unavailable, underscoring a broader issue that many customers and vendors have begun to notice.
Days later, Saks Global, the parent company of Saks Fifth Avenue and Neiman Marcus, filed for Chapter 11 bankruptcy protection, seeking to stabilise its finances amid mounting debt and operational challenges. The company said it had secured $1.75 billion in new financing from investors led by Bracebridge Capital and Pentwater Capital, a move intended to keep stores operating while restructuring efforts proceed. Even so, the filing has raised serious questions about the long-term viability of the luxury retail group.
Saks Global’s difficulties have intensified since its 2024 acquisition of Neiman Marcus, a $2.7 billion deal that executives had promoted as a way to cut costs and strengthen both brands. Instead, the merger added to existing pressures. Traditional department stores were already struggling with changing consumer habits, rising debt and competition from e-commerce platforms. Saks Fifth Avenue began reporting steep, double-digit quarterly sales declines as early as 2023, well before the merger’s promised benefits could take effect.
The situation worsened in late December when Saks failed to make a $100 million interest payment tied to roughly $2.2 billion in merger-related debt. At the same time, tensions with suppliers escalated as vendors complained of payment delays stretching over several months, prompting some to halt shipments altogether. The company declined to comment on inventory shortages or its plans to resolve outstanding vendor payments.
Leadership upheaval has added to the uncertainty. Former chief executive Marc Metrick stepped down abruptly in early January. He was replaced by Richard Baker, the company’s executive chairman and architect of the Neiman Marcus deal. Soon after, Saks announced another change, saying Baker would also step aside, with former Neiman Marcus chief Geoffroy van Raemdonck set to take over.
Retail analysts say the bankruptcy filing does not necessarily mean immediate store closures, but confidence in the company’s strategy has eroded. Mark Cohen, former head of retail studies at Columbia Business School, described the situation as the culmination of years of missteps, arguing that leadership decisions dating back more than a decade prioritised deal-making over the fundamentals of running a healthy retail business. According to Cohen, chronic delays in paying suppliers were evident even before the Neiman Marcus acquisition, a sign of long-standing cash flow problems that were magnified by taking on billions of dollars in new debt.
For shoppers, the fallout has become increasingly visible. Inventory shortages, cancelled online orders and inconsistent availability have begun to undermine customer loyalty. Richard Browne, a 66-year-old marketing consultant from North Carolina, said he was drawn to Saks for its quality clothing and competitive prices but noticed more items marked out of stock last year. After placing an online order for discounted jeans on New Year’s Day, he received an email the next day informing him the item was unavailable and his order had been cancelled. He said the experience has made him less inclined to shop with the retailer in the future.
Vendors, too, are reassessing their relationships with Saks. Some continue supplying goods to avoid severing ties with a major luxury player, while others have pulled back. Finance firm Hilldun, which guarantees orders for around 130 brands working with Saks, announced in November that it would stop approving new orders. One vendor, speaking anonymously, said he was still owed tens of thousands of dollars for past shipments and had been instructed to halt fulfilment of new orders, calling the situation confusing and increasingly desperate.
As Saks Global attempts to restructure, its bankruptcy has laid bare the fragile state of a luxury retail empire once seen as a cornerstone of American shopping culture, leaving customers, suppliers and investors watching closely to see whether it can regain its footing.
