Saks Global is facing financial difficulties and is attempting to raise up to $1 billion to avoid filing for Chapter 11 bankruptcy, according to CNBC. The company is seeking “debtor-in-possession” (DIP) financing to maintain operations during potential bankruptcy proceedings, but investor interest has been minimal. Many potential lenders are hesitant to provide funds due to concerns about Saks’ ability to repay.
Saks, which owns Neiman Marcus and Bergdorf Goodman, operates over 70 luxury stores and around 100 off-price stores. Following a default on interest payments to bondholders, only a limited number of investors are contemplating financing, primarily those with distressed retail experience. The firm’s financial troubles have intensified since its acquisition of Neiman Marcus in a $2.7 billion deal in 2024, which was meant to enhance its market position but has led to inventory shortages and declining sales instead.
If Saks cannot secure the necessary DIP financing, it could hinder its Chapter 11 filing, potentially leading to liquidation under Chapter 7. The Fifth Avenue flagship store remains its most valuable asset, and Saks is currently discussing store closures with liquidators. The overall luxury goods market has also seen stagnant growth, further complicating Saks’ recovery efforts.
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