Saks Fifth Avenue Navigates Chapter 11 with Strategic Restructuring
NEW YORK (AP) – Saks Fifth Avenue and its parent company, Saks Global, are undergoing significant changes as part of a Chapter 11 bankruptcy restructuring. The company announced a series of strategic decisions, including the closure of eight Saks Fifth Avenue stores and the Neiman Marcus Boston location, as it focuses on profitability and debt reduction. This move reflects a broader trend in the luxury retail sector, facing increased competition and evolving consumer habits.
Store Closures and Consolidation
The Saks Fifth Avenue locations slated for closure include stores in Philadelphia, Columbus (Ohio), and Phoenix. Following these closures, Saks Global will operate 25 Saks Fifth Avenue stores and 35 Neiman Marcus stores. Notably, the two Bergdorf Goodman stores will remain open, signaling their continued importance to the company’s portfolio. These stores will remain operational until the end of April.
Beyond the flagship stores, Saks Global is also streamlining its operations by winding down 14 standalone Fifth Avenue Club personal styling suites, retaining only three. Furthermore, the company will be discontinuing Horchow.com, a home goods retailer acquired by Neiman Marcus in the late 1980s. Customers will now find the full Horchow assortment on NeimanMarcus.com.
Strategic Shift and Multichannel Focus
According to Geoffroy van Raemdonck, CEO of Saks Global, these actions are designed to “reinforce Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman as the ultimate destinations for luxury with a seamless multichannel shopping experience.” This indicates a commitment to integrating online and offline retail channels to better serve customers.
Saks Off 5th and Last Call Restructuring
These changes follow a previous announcement regarding Saks Off 5th locations. The company plans to close most of its 70 Saks Off 5th stores, leaving only 12 outlets operational. These remaining stores will primarily function as a channel for selling residual inventory from Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman. Additionally, Saks Global has shuttered its remaining five Last Call stores, which served as a discount outlet for Neiman Marcus.
Financial Challenges and Reorganization
Saks Global filed for Chapter 11 reorganization on January 14th, citing rising competition and substantial debt incurred from the acquisition of Neiman Marcus just over a year prior. The company secured approximately $500 million of a broader $1.75 billion financial package to help pay suppliers and maintain merchandise stock. This financial support is crucial for ensuring the continued operation of the remaining stores and the successful execution of the restructuring plan.
The company’s restructuring efforts are a response to the evolving landscape of the luxury retail market. By focusing on its most profitable businesses and streamlining operations, Saks Global aims to emerge from Chapter 11 as a stronger and more competitive player. For more information on retail restructuring, consider exploring resources from the Retail Dive.
