After months of speculation, Saks Global, owner of Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman, has filed for bankruptcy.
The company confirmed it has filed for Chapter 11 bankruptcy and has secured a financing commitment of approximately $1.75 billion. This will ostensibly give the company time to reorganize and restructure its operations and debts.
In addition, Saks Global announced the appointment of Geoffroy van Raemdonck as chief executive officer, effective immediately. Richard Baker stepped down from his role as executive chairman and CEO of Saks Global on January 13.
“This is a defining moment for Saks Global, and the path ahead presents a meaningful opportunity to strengthen the foundation of our business and position it for the future,” said van Raemdonck. “In close partnership with these newly appointed leaders and our colleagues across the organization, we will navigate this process together with a continued focus on serving our customers and luxury brands.”
The filing follows a chaotic month that fueled near-daily headlines. In December, factor Hilldun Corporation paused approvals on shipments to Saks after the retailer missed two weeks of payments. At the time, CEO Gary Wassner told Vogue Business that he hoped to resume payments before the end of the year. As of January 6, he still had not done so.
On January 2, Saks announced that Marc Metrick, who had been at the company for 30 years, had stepped down from his role as CEO, to be replaced by then-executive chairman Richard Baker. On January 11, reports emerged that Baker, too, would exit the company. And on January 13, outlets reported that former Neiman Marcus CEO Geoffroy van Raemdonck, who led the retailer through its own Chapter 11 proceedings before it was acquired by Saks, had been appointed to the role.
Saks has also secured a $1.75 billion financing debt-in-possession plan to enable the business to keep running during reorganization. An immediate cash injection of $1 billion will be provided by an investor group led by Pentwater Capital Management in Naples, Florida, and Boston’s Bracebridge Capital. The expected $750 million will come from asset-backed lenders led by Bank of America.
The news comes as a blow to independent and emerging brands, for many of whom Saks Global’s retailers make up a significant chunk of business (some say 50% or more). Though the financing package will purportedly enable Saks to pay its vendors, in all likelihood, smaller brands will likely be the last to receive any payment — if they wind up getting paid at all, experts say.
“Geoffroy has a proven track record driving transformative growth at Neiman Marcus Group and other brands, building trusted relationships within these organizations and throughout the industry. His leadership will help advance the Company’s focus on stability and long-term value creation,” said Paul Aronzon, a member of Saks Global’s board of directors. “We also want to thank Richard, who was a visionary leader during his tenure at Saks Global. We are grateful for his contributions and wish him continued success in the future.”
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