In late 2024, Saks Global Enterprises sealed a landmark merger between Saks Fifth Avenue and Neiman Marcus, uniting two pillars of American luxury retail under backing from Amazon, Salesforce, and Authentic Brands Group. Fueled by billions in new capital, the deal aimed to reinvent department stores through digital upgrades—but within 12 months, the venture teetered on bankruptcy after missing a $100 million debt payment on December 30, 2025.
From Triumph to Turmoil
The merger initially sparked optimism across the industry. Investors poured in funds for e-commerce enhancements, unified inventory across Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman, and advanced analytics from Salesforce. Yet by mid-2025, sales eroded despite prior holiday gains. Foot traffic dropped as affluent shoppers visited less often, encountering heavy discounts that undermined luxury pricing. In August, Saks restructured nearly $1 billion in debt and secured $600 million in emergency capital. October brought a slashed revenue forecast, igniting lender alarm.
The Missed Payment Trigger
December 30 marked the breaking point. Saks Global defaulted on a $100 million interest payment to bondholders, activating default clauses and hastening bankruptcy preparations. With credit markets tight and asset values sinking, executives turned to investment bank PJT Partners for options like bridge loans, debt swaps, or asset sales. Creditors convened for debtor-in-possession financing, a lifeline often preceding Chapter 11 filings. Wall Street Journal reporting confirmed the company was drafting bankruptcy documents.
Investor Losses Mount
Bond prices signaled desperation. The $941 million second-out notes fell from 36 cents to 6 cents on the dollar in two weeks—an 83% drop. Senior debt slid to 46 cents. Over $1 billion in losses hit investors nearly overnight. Between late 2024 and mid-2025, Saks raised $2-3 billion via bonds, restructurings, and credit. Much vanished into operations, debt service, markdowns, and stalled tech initiatives, leaving little for promised transformations.
Broader Luxury Struggles
Amazon and Salesforce’s involvement highlighted tech’s limits in retail. Their AI, logistics, and personalization tools failed to counter weak demand, price wars, and shifting priorities. The downfall mirrors industry woes: McKinsey and Bain & Company note conditions not seen in over 15 years, with high interest rates curbing spending, Chinese buyers withdrawing, and younger consumers favoring value and sustainability. Bain projects 2025 global luxury sales down 2-5%. Gucci, Chanel, and Dior have restructured amid declines. Hudson’s Bay Company, Saks’s former parent since 1670, liquidated its stores in 2025, ending a 355-year run.
Human and Operational Fallout
Some 10,000-15,000 workers across approximately 170 locations—including 70 full-line luxury stores and 100 off-price outlets—face layoffs post-holidays, when payrolls peak. Vendors, owed substantial sums, now demand cash on delivery and halt shipments. Customers risk losing gift card values, refunds, and layaways in bankruptcy, joining unsecured creditors for minimal recovery. In Chapter 11, secured lenders prioritize, followed by bondholders facing haircuts; junior debt fares worst as store values plummet.
Bankruptcy looms as the probable path forward, with PJT Partners negotiating reorganization into a leaner entity. Creditors eye controlled sales over liquidation, but debt scale and decline speed complicate recovery. The outcome will determine store survivals, job preservations, and investor salvages in a sector demanding reinvention.
Sources:
Bain & Company – Luxury goods market slowdown and state of fashion analysis. Cited in McKinsey State of Luxury report
Consulting analysts report – Luxury industry executive sentiment survey. Referenced in Fashion Dive and Bloomberg luxury coverage
Wall Street Journal – Exclusive reporting on Saks Global bankruptcy preparation and missed debt payment