Saks Global Enterprises, the luxury retail group behind Saks Fifth Avenue and Neiman Marcus, is reportedly considering filing for Chapter 11 bankruptcy in the US, despite having raised billions of dollars from investors. The move is being explored as a last-resort option as a deadline to pay off more than $100 million looms, according to unnamed sources cited by Bloomberg.
The company raised substantial funds from bond investors last year to finance its $2.65 billion acquisition of Neiman Marcus, hoping the merger would turn around its struggling business. However, the deal has instead increased its debt burden. By May, bondholders faced paper losses exceeding $1 billion, Bloomberg reported.
Saks Global must make interest payments of over $100 million by 30 December, according to data compiled by Bloomberg. The company is also considering emergency financing or asset sales to generate quick cash, the sources added.
In a statement to The Independent, a Saks Global spokesperson said: 'Together with our key financial stakeholders, we are exploring all potential paths to secure a strong and stable future for Saks Global and advance our transformation while delivering exceptional products, elevated experiences and personalised service to our customers. Importantly, opportunities in the luxury market remain strong, and Saks Global continues to play a distinct and enduring role within it.'
The company's discount arm, Saks Off 5th, is set to close its flagship store in New York City's Upper East Side on 31 December, along with nine other locations across the US beginning in January. Saks Off 5th told USA TODAY the closures would allow it to focus on high-performing stores. Both Saks Fifth Avenue and Neiman Marcus have been operating since the early 20th century, but department stores have faced declining popularity due to the rise of online shopping.
