This story was originally published on Retail Dive. To receive daily news and insights, subscribe to our free daily Retail Dive newsletter. Saks Global’s bankruptcy filing last month triggered a clause in its agreement with Authentic Brands Group, bumping Authentic’s interest in the luxury company’s intellectual property — or aspects of it. Authentic now owns a 77% interest in the entity that holds a perpetual master license to the IP of Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman, up from 51 ...

Company Overview - Saks Global, the luxury retailer behind brands like Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman, has filed for Chapter 11 bankruptcy due to difficulties in paying debts amid financial challenges [4] - The company has secured $1.75 billion in committed capital to support its restructuring efforts [4] Market Context - The luxury retail market experienced a surge post-pandemic, but inflation and rising interest rates have restricted the customer base to ultra-wealthy consumers [4] - Major fashion houses are increasingly bypassing traditional retailers by establishing their own boutiques and online platforms, which has intensified competition for Saks Global [4] Strategic Moves - Hudson's Bay, the Canadian owner of Saks, made a significant move by acquiring Neiman Marcus for $2.7 billion to consolidate the luxury market under Saks Global [5] - The integration of Neiman Marcus into Saks Global faced challenges, including funding issues and limited growth potential due to customer overlap [5] Competitive Landscape - Bloomingdale's, owned by Macy's, reported its best sales growth in three years by maintaining a strong balance sheet and pivoting to smaller stores with curated inventory [5] - Nordstrom has successfully maintained supplier relationships and improved cash flow through its off-price division, Nordstrom Rack, while also going private to focus on long-term strategies [5] Creditors and Stakeholders - Key creditors of Saks Global include luxury brands Kering and LVMH, while equity shareholders include Amazon, Salesforce, and G-III Apparel [6]

Group 1 - Saks Global has entered a 50-50 joint venture with Authentic Brands Group, which collects royalties from sales of various luxury brands, excluding U.S. and Canadian stores and global e-commerce [3][4] - In the event of bankruptcy, Authentic's preferred equity in Saks will be exchangeable for a 77% stake in the joint venture [4] - The joint venture involved transferring intellectual property related to Saks and other brands to subsidiaries that are not guarantors on the debtors' funded debt [5] Group 2 - Saks Global's agreement with Amazon requires the company to pay referral fees and potentially true-up payments totaling up to $900 million over eight years, which may need to be renegotiated due to the company's financial struggles [6] - The company reported a $550 million inventory shortfall, complicating its plans to rejuvenate the business and pay vendors [7] - Despite raising $600 million in new funding, Saks Global could only allocate $244 million for vendor payments, as the rest was needed for working capital amid significant EBITDA losses [8]

Core Insights - Saks Global is expected to file for bankruptcy by early-to-mid next week, with a reorganization plan that includes numerous store closures across its portfolio [1] - At least 20 Saks Fifth Avenue and Neiman Marcus locations have been identified for closure, with a total of 33 Saks Fifth Avenue stores and 36 Neiman Marcus stores in operation [2] - The company is in discussions with key financial stakeholders and exploring all potential options, with no final decisions made yet [3] Store Closures - The reorganization plan will likely lead to the closure of underperforming stores, particularly in locations such as St. Louis, Las Vegas, and several cities in Texas and Florida [4] - Saks Fifth Avenue's stronger locations include Houston, Naples, and Beverly Hills, while Neiman Marcus's top stores are in Dallas, Beverly Hills, and San Francisco [5][6] Financial Strategy - If a Chapter 11 reorganization is approved, flagship locations like Bergdorf Goodman and Saks Fifth Avenue in Manhattan are expected to survive [4] - The company has previously indicated plans to close up to 10 Saks Fifth Avenue stores following its merger with Neiman Marcus in December 2024 [3]

Core Viewpoint - Saks Global Enterprises is preparing to secure a loan of up to $1 billion as part of a Chapter 11 bankruptcy filing anticipated in the coming weeks [1] Financial Situation - The luxury retailer has missed an interest payment exceeding $100 million due on December 30 and is negotiating a forbearance with creditors to gain time for a financing agreement or reorganization plan [2] - Discussions among bondholders include a debtor-in-possession loan potentially comprising at least $750 million in new funds and a roll-up of existing debt to facilitate operations post-bankruptcy filing [3] Company Background - Saks has a history of over 150 years and is currently facing liquidity challenges due to inventory and cash-flow pressures, reaching a critical point after raising billions from bond investors for a turnaround plan involving the acquisition of Neiman Marcus [5] - The company has struggled with declining sales and inventory management issues, leading to a 13% year-over-year revenue drop to $1.6 billion in the second quarter [7] Leadership Changes - Amid financial difficulties, the CEO Marc Metrick has stepped down, with Executive Chairman Richard Baker taking over the role [6]

Group 1 - Saks Global completed a $2.7 billion acquisition of Neiman Marcus Group, creating a luxury department store giant, but skepticism about its future remains [1] - The company is facing a critical situation with over $100 million in interest payments due on December 30, and is reportedly considering Chapter 11 bankruptcy as a last resort [2] - Despite a refinancing effort that raised $600 million, liquidity concerns persist, impacting the company's ability to purchase inventory and manage debt [2][3] Group 2 - Standard & Poor's projected a $500 million deficit in reported free operating cash flow for the year, indicating that liquidity will be quickly depleted due to necessary investments [3] - Hilldun Corp., a key supporter, has paused new order approvals after Saks missed payments, leading to increased caution among bondholders [4] - The potential bankruptcy of Saks Global could lead larger brands with concession shops to retain their inventory, indicating significant changes in the department store channel [5]

Legal Dispute Overview - The legal battle between former Bergdorf Goodman chief merchant Yumi Shin and Saks Global is ongoing, with Shin seeking to dismiss the case against her, claiming that a federal court trial in Texas violates her rights [1][3] - Saks Global is attempting to have information regarding its acquisition of the Neiman Marcus Group redacted from Shin's court filings, citing confidentiality concerns [2][4] Allegations and Legal Actions - Saks Global's lawsuit, filed in November, accuses Shin of violating her non-compete agreement and stealing proprietary information, although the specifics of the alleged stolen information remain unclear [3] - Shin served as the chief merchandising officer at Bergdorf Goodman from January 2019 until her departure in October 2025, with plans to join Nordstrom [3] Financial Aspects and Merger Details - Saks Global announced the acquisition of the Neiman Marcus Group for $2.7 billion in December 2024, and is seeking to protect sensitive information related to the merger in the ongoing legal proceedings [4][5] - The company is also pursuing damages, attorneys' fees, and costs associated with the trial [5] Impact on Employment - The legal dispute is delaying Shin's potential employment with Nordstrom, which had hoped for her swift transition to the company [6] - Typically, in cases involving non-compete agreements, parties may reach a financial settlement to expedite the individual's employment, although Nordstrom has not commented on this situation [6]