Saks Global wins bankruptcy approval, to exit Chapter 11 with fewer stores

Saks Global won court approval for its bankruptcy plan on June 5, clearing the luxury retailer to leave Chapter 11 with a smaller store base, less debt and control in the hands of senior lenders. U.S. Bankruptcy Judge Alfredo Perez approved the restructuring at a hearing in Houston and said the company had done an “extraordinary” job stabilizing the business after a rocky start to the case.

The reset is severe. Saks Global’s equity will be wiped out, its pre-petition debt will be largely eliminated and senior lenders will take over the company. Saks said the plan will cut debt by nearly 75% at emergence, a striking shrinkage for a retailer that entered bankruptcy on January 13 with $3.4 billion in debt after its merger with Neiman Marcus strained cash and vendor relationships.

The company said it expects to exit Chapter 11 within weeks with 49 luxury retail locations, including 33 Neiman Marcus stores, 15 Saks Fifth Avenue stores and Bergdorf Goodman. That is a far leaner footprint for a business that entered bankruptcy with 33 Saks Fifth Avenue locations alone, and it signals how aggressively the company is retreating from prestige-by-expansion toward a tighter, more profitable network. Saks also plans to close off-price retail stores, concentrating on full-price luxury customers rather than trying to support a sprawling chain.

The financing behind the emergence underscores how much outside support was needed to keep the business alive. Senior lenders will provide $1 billion in new money through bankruptcy and another $500 million after exit. The plan also sets aside a $20 million litigation trust for junior creditors, who are owed about $1.5 billion and would likely receive nothing without it. Saks said the plan had support across the capital structure and that the overwhelming majority of participating creditors voted in favor.

For the luxury sector, the case is becoming a warning about debt-fueled consolidation. Saks’ 2024 acquisition of Neiman Marcus, financed in part with $2.2 billion in junk bonds and later closed as a $2.7 billion transaction, left the combined company with too little liquidity to pay vendors consistently. That, in turn, contributed to inventory gaps and falling sales, forcing the retailer to compile critical-vendor lists just to keep shelves stocked. The restructuring now gives Saks a chance to repair those relationships, but it also shows that even iconic department-store names may have to behave less like broad-based prestige empires and more like disciplined, capital-efficient e-commerce businesses if they want to survive.