S&P Global Ratings downgrades Saks Global on missed interest payment

Group 1 - Saks Global is facing significant operational challenges, including a free operating cash flow deficit and an unsustainable capital structure, which hinder the realization of synergies from the acquisition of Neiman Marcus Group [3][4] - The company has targeted annualized cost reductions of $600 million over the next few years but is struggling to achieve these efficiencies [3] - Revenue declined by more than 13% in Q2 2025, exacerbated by overdue payments to suppliers that disrupted the supply chain and resulted in insufficient inventory [5] Group 2 - Saks Global's liquidity issues were highlighted by a $410 million free operating cash flow deficit year to date, and the $600 million funding from lenders was insufficient to restore inventory flow [5][6] - The company sold Neiman Marcus' Beverly Hills flagship store shortly before Christmas and is considering selling a stake in Bergdorf Goodman, but has faced challenges in monetizing assets [7] - Analysts predict that bankruptcy is likely and imminent for Saks Global, which has not ruled out this possibility [8] Group 3 - S&P Global Ratings downgraded Saks Global to "selective default" from CCC due to a default on a $100 million debt payment due on December 30 [9] - The analysts do not expect the company to make the payment within the 30-day grace period due to ongoing liquidity issues [9]