The rumors had been swirling for months, but when the news finally dropped last Tuesday night, it hit like a ton of bricks. Saks Global—the powerhouse holding company for Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman—filed for Chapter 11 bankruptcy protection. It’s a massive blow. Just over a year ago, everyone was talking about the $2.7 billion "marriage of the century" between Saks and Neiman Marcus. Now? They’re sitting in a Houston federal court trying to figure out how to pay back billions in debt.
Honestly, if you’ve walked into a Saks lately and noticed the shelves looking a bit... thin? You aren't crazy. The Saks Fifth Avenue news hitting the wires right now confirms what high-end shoppers have whispered about: the inventory is drying up because the brands themselves stopped shipping. When you don't pay Chanel, they don't send the bags. It's that simple.
The $1.75 Billion Lifeline
So, is Saks closing for good? Not exactly. On January 14, 2026, the company secured a $1.75 billion financing package to keep the lights on. This isn't "free money." It’s a debtor-in-possession (DIP) loan. Basically, it’s a high-interest credit card for companies in bankruptcy so they can keep paying employees and (hopefully) buy some new stock for the spring season.
The breakdown of the cash is actually pretty intense:
- $1.5 billion is coming from a group of senior bondholders who really don't want to see the company die.
- $240 million is coming from existing lenders as "incremental liquidity."
- Another $500 million is waiting on the other side once they successfully exit bankruptcy, which they hope will happen later this year.
Why the Neiman Marcus Merger Failed So Fast
You’ve gotta wonder how a deal that looked so good on paper turned into a disaster in twelve months. Richard Baker, the real estate mogul who’s been the face of Saks for years, was the architect of this whole thing. The goal was to create a "luxury powerhouse" that could stand up to the rise of online shopping and brands like Gucci and Louis Vuitton opening their own boutiques.
But the timing was terrible.
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Global luxury sales have been tanking. According to a study from Bain & Co. released late last year, the luxury market is contracting for the second year in a row. People just aren't spending $3,000 on a jacket like they used to. Plus, Saks took on a mountain of "junk bond" debt to buy Neiman Marcus. When you mix slowing sales with high interest rates and massive debt payments, you get a train wreck.
The Leadership Carousel
The drama in the C-suite has been wild. Marc Metrick, the longtime CEO, stepped down on January 2. Richard Baker jumped into the CEO seat himself, only to quit both the CEO and Executive Chairman roles less than two weeks later on January 13.
Now, Geoffroy van Raemdonck is the guy in charge. If that name sounds familiar, it's because he was the CEO of Neiman Marcus before the merger. It's a bit of a full-circle moment, but he’s walking into a firestorm. He’s already brought back a "dream team" of former Neiman executives, like Darcy Penick as President, to try and steady the ship.
Store Closures: What We Know Right Now
You’re probably wondering if your local store is on the chopping block. For the main Saks Fifth Avenue stores, the company says they are staying open. They have 41 of them across North America, and they’re the "crown jewels" of the business.
However, the "Off 5th" discount stores are a different story.
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Back in November, the company already confirmed they were shutting down about nine Saks Off 5th locations. As of this week, those closures are moving forward in places like:
- Austin, Texas
- Chicago, Illinois
- East Hanover, New Jersey
- Philadelphia (Franklin Mall)
- Washington, D.C.
They’re basically "trimming the fat." The company claims they want to focus on "high-performing" locations, but in bankruptcy-speak, that usually means "we can't afford the rent here."
The Real Estate Shell Game
Here’s a detail most people miss: Saks Global actually owns a ton of real estate. We’re talking over $4 billion worth of property. To try and stay afloat before the bankruptcy filing, they started selling off the land under their stores. They sold the Neiman Marcus land in Beverly Hills and San Francisco just days before Christmas.
It’s a risky move. Selling the land gives you quick cash, but it means you now have to pay rent to a new landlord. It’s like selling your house and then renting the master bedroom from the new owner. It keeps you from being homeless today, but it makes your monthly bills much higher tomorrow.
The Vendor Crisis: Why Chanel is Owed $136 Million
The bankruptcy filings revealed something pretty shocking. Saks owes a staggering amount of money to the brands we love. Chanel is the biggest "unsecured creditor," sitting at the top of the list with a claim of roughly $136 million.
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Other luxury groups like LVMH (who owns Dior and Louis Vuitton) and Kering (Gucci, Saint Laurent) have also been "stretched" for payments. Some of these brands actually stopped shipping products to Saks stores back in December. This created a "death spiral." No bags meant no customers. No customers meant no money to pay the brands.
What This Means for You (The Shopper)
If you have a gift card or "Saks First" points, don't panic—at least not yet. In the first day of court hearings, the judge approved "first day motions" that allow Saks to continue honoring customer loyalty programs and returns.
But, if you’ve been eyeing a specific designer piece, you might want to buy it sooner rather than later if it’s actually in stock. With the bankruptcy process underway, inventory is going to be unpredictable for a while.
Actionable Insights for 2026
If you’re a regular at Saks or Neiman Marcus, here is how you should handle the next few months:
- Use Your Gift Cards: While they are being honored now, things can change fast in a Chapter 11 case. If you have a balance, spend it.
- Check Return Policies: During restructuring, stores sometimes tighten up return windows. Double-check your receipt before walking out.
- Look for Sales: Expect "promotional activity" (that's corporate for "big sales") as they try to clear out old inventory to make room for new stuff bought with their fresh loan money.
- Keep Your Saks First Points: These are currently safe, but keep an eye on your email for "updates to terms and conditions."
The luxury world is changing, and the days of the giant, all-encompassing department store might be numbered. Saks is betting everything on this reorganization. Whether they can actually pull it off in a world where everyone shops on their phone and the economy is shaky is the billion-dollar question. For now, the flagship doors stay open, and the lights are still on, but the vibe inside is definitely different.