Saks Fifth Avenue in Talks to Avoid Bankruptcy
Lenders and suppliers for Saks Fifth Avenue are reportedly in talks to avoid a potential court fight over a bankruptcy loan. The discussions highlight the ongoing financial fragility of department store retail, a key source of branded surplus inventory for the off-price channel.
- The parent company, Saks Global, officially filed for Chapter 11 bankruptcy on January 14, 2026, after a period of financial distress following its 2024 acquisition of Neiman Marcus. - To operate during the restructuring, Saks Global has secured $1.75 billion in financing from a group of senior bondholders and its asset-based lenders. - A major point of contention involves luxury suppliers who are fighting to prevent their unpaid, consigned inventory from being claimed as collateral by the bankruptcy lenders. - The list of unsecured creditors features major luxury brands, with Chanel owed over $136 million, Kering (owner of Gucci) owed around $60 million, and LVMH about $26 million. - As part of the bankruptcy, the company is closing eight Saks Fifth Avenue stores and one Neiman Marcus location, leaving 25 Saks and 35 Neiman Marcus stores in operation. - The company is drastically shrinking its off-price channel, closing most Saks OFF 5TH locations and all remaining Last Call stores to focus on full-price luxury. - The remaining 12 Saks OFF 5TH stores will no longer buy their own merchandise but will instead serve as a channel to sell residual inventory from Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman. - The bankruptcy is occurring amid a broader wave of retail distress, with at least 18 major companies filing for bankruptcy in the first few weeks of 2026, the highest rate since the 2020 pandemic.
