The Council of Fashion Designers of America, the British Fashion Council, the Camera Nazionale della Moda Italiana, and the Fédération de la Haute Couture et de la Mode are calling on Saks Global to pay its debts to independent designers.
On Monday, March 16, the leaders of the four global fashion councils — the governing bodies that oversee fashion designers in their respective countries — wrote a joint letter to Saks CEO Geoffroy van Raemdonck urging the company to factor the fates of small industry players in its restructuring plans. The letter came just hours after Saks Global announced that it had received approval of its five-year business plan by an ad hoc group of the Company’s senior secured bondholders — and secured access to an additional $300 million of its $1.75 billion in committed capital accordingly.
“We are writing to address the impact of Saks Global’s current restructuring process on young and independent fashion brands,” Steven Kolb (CFDA), Laura Weir (BFC), Carlo Capasa (CNMI) and Pascal Morand (FHCM) wrote. “We understand that restructuring processes are complex and often involve tough decisions. At the same time, we have been informed that some emerging and independent designers have been told they might not be paid for goods they have already delivered.”
Saks is in the midst of finalizing its restructuring plan, which will be filed with the US Bankruptcy Court for the Southern District of Texas within the next several weeks, Saks confirmed on Monday. The fashion council leaders are urging Saks Global to ensure that young and independent brands are treated fairly and responsibly in resolving outstanding payments under this plan. The goal of the letter is to show unity among the four fashion capitals in support of independent brands, says Kolb.
It also comes on the heels of Saks Global’s confirmation earlier this month that it had been focusing on its relationships with brand partners, and had resumed shipping from nearly 600 brands, releasing close to $1.4 billion in retail receipts. Saks also said that it had reached or nearly reached agreements with over 175 brands across categories, from large maisons to smaller brands.
“We have a great respect for the Council of Fashion Designers of America, the British Fashion Council, the Camera Nazionale della Moda Italiana, and the Fédération de la Haute Couture et de la Mode and the work they do on behalf of talented designers across our industry,” a spokesperson for Saks Global said in a statement. “The company is reviewing the letter that was sent today. Due to requirements within Chapter 11 cases, we are limited in the pre-petition payments we are authorized to make. We are focused on the steady progress we are making in rebuilding trust with our established and emerging brand partners and strengthening these relationships to drive our collective businesses. We work with a significant number of independent designers and look forward to building on our long-standing industry relationships as we lay the path for a strong future for Saks Global and our partners.”
Since Saks declared bankruptcy in January, emerging and independent brands have been left in the lurch, reporting thousands of dollars of still-unpaid bills for goods shipped prior to bankruptcy. “We are in a different position than Chanel where they will not sink or swim because of the payments from Saks Global that are to be repaid,” one designer told Vogue Business in January. “Whereas it could very much tank my business if we are not paid by them.”
“We plan our whole year on [Saks Global retailer orders], so it creates a really big cash flow issue — especially when you have things like fashion shows you’re supposed to do, and factories you’re supposed to pay,” another designer said in December, as bankruptcy murmurs bubbled. “It gets really hard.”
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