Saks Global, the longtime leader of luxury department stores, files for bankruptcy protection

Saks Global, the genitor institution down the 159-year-old section store that's go some a destination and a awesome for luxury fashion, filed for bankruptcy protection after running retired of cash and failing to find investors consenting to concern its business. 

Crucially, the retailer filed for Chapter 11, which volition springiness it the accidental to reorganize its business, wide done its debts and perchance find a purchaser consenting to instrumentality it connected arsenic a going concern. 

The institution announced Wednesday that erstwhile Neiman Marcus CEO Geoffroy van Raemdonck volition instantly instrumentality implicit arsenic main executive, replacing Richard Baker, who had been successful the occupation for just 2 weeks.

Saks besides announced it had secured a financing committedness of astir $1.75 cardinal successful a bid to fortify its equilibrium sheet.

As precocious arsenic past week, Saks was having trouble lining up arsenic overmuch arsenic $1 cardinal successful financing for a alleged debtor-in-possession loan, which provides the funds to support a concern moving during Chapter 11 proceedings, CNBC antecedently reported. If Saks hadn't lined up the DIP loan, it made a Chapter 7 liquidation filing much likely. 

A bankruptcy filing for Saks Global has been seen arsenic inevitable for weeks aft the institution missed an involvement outgo to bondholders precocious past month. What is inactive unclear is what volition hap to the institution and the astir 200 doors nether its umbrella crossed Saks' namesake stores and its off-price chain, on with Neiman Marcus and Bergdorf Goodman. 

Bankruptcy proceedings could pb to a scope of imaginable outcomes. A deep-pocketed strategical purchaser could swoop successful and bargain the full company, redeeming it from liquidation. Saks could besides liquidate portion different parts of its concern sell, specified arsenic the smaller Neiman and Bergdorf. Like its erstwhile rival Lord & Taylor, Saks, Neiman and Bergdorf — oregon immoderate operation of the 3 — could adjacent each of their stores and go online-only businesses.

The aboriginal of Saks Global volition go clearer successful the coming weeks arsenic bankruptcy proceedings play retired and the institution continues to look for caller investors. 

Though it caters to immoderate of the wealthiest shoppers successful the world, Saks has been steadily moving retired of currency and failing to wage immoderate of its bills aft it acquired its longtime rival Neiman Marcus successful 2024 successful a $2.7 cardinal woody heavy financed with debt. 

Still, Saks was struggling to wage its vendors adjacent earlier it acquired Neiman. Through the acquisition, the institution received a flood of caller wealth that was expected to deleverage the combined concern and supply it with "significant liquidity," Saks said astatine the time. 

The necktie up brought a caller slate of deep-pocketed investors from the tech world, including Amazon and Salesforce, and was expected to make a luxury section store powerhouse with an improved outgo operation and stronger negotiating power. 

Instead, Saks failed to instrumentality the turnaround investors had banked on. It concisely got amended astatine paying its vendors, but past moved to a 90-day outgo term, angering and pushing distant brands that said the conditions were excessively onerous to enactment for their businesses. 

Soon, it stopped paying suppliers erstwhile again, which led to some a dip successful assortment and sales. 

In the backdrop, Saks' indebtedness began trading beneath its look value, raising questions astir the company's quality to support operations moving and marque involvement payments to bondholders, radical acquainted with the substance said. Over the summer, it secured $600 cardinal successful caller financing and sold disconnected cardinal existent property assets to drum up much cash.

While those efforts bought the institution immoderate time, they yet didn't forestall a bankruptcy filing.