- Saks Global filed for Chapter 11 in January 2026 after its late-2024, roughly $2.7B Neiman Marcus acquisition left it overlevered with high-yield debt.
- Amazon, which put in $475M of preferred equity tied to “Saks at Amazon,” says its stake is likely worthless and accuses Saks of missed targets, cash burn, and large vendor arrears.
- The company secured $1.75B in DIP financing to keep operating, with the court approving initial access over Amazon’s objections.
- Leadership turnover and strained vendor relations underscore that the crisis is operational as well as financial, highlighting broader risks in PE-style leverage-driven retail consolidation.
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The collapse of Saks Global illustrates the risk of aggressive private equity strategy when leveraged buyouts are paired with high optimism about synergies and post-merger scale. The $2.7 billion Neiman Marcus acquisition in December 2024 placed enormous debt burdens on Saks, with terms sourced via high-interest junk bonds. While fashion and luxury retail can show resilience, particularly among wealthy customers, they are not immune to supply chain problems, slowdowns in consumer demand, or inventory misalignments—each of which Saks Global experienced.
Amazon’s involvement is central to understanding shareholder and creditor dynamics. With a $475 million preferred equity stake, Amazon had conditional rights, including a $900 million guaranteed payment over eight years tied to the “Saks at Amazon” platform and referral fees. Amazon alleges Saks underperformed wildly—missed budgets, burned through cash, and failed to deliver on commitments. The bankruptcy proposal, particularly the DIP financing plan, places Amazon far down the repayment ladder.
The strategic implications for private equity and retail sectors are stark. Firms that prioritize real estate appreciation and leverage over retail fundamentals can accelerate decline. Management changes are a signal of loss of confidence among bondholders and stakeholders. New CEO Geoffroy van Raemdonck, with prior experience at Neiman Marcus, may help restore vendor relations and retail operations. But rebuilding credibility will take time, and not all stores are likely to survive.
Open questions include: What recoverable value remains for Amazon and other unsecured creditors? Will Saks be able to negotiate materially better operational performance post-bankruptcy? Can the company stabilize or reduce its debt without severe asset sales or downsizing? And are there wider lessons here for PE, junk debt financing, and the treatment of vendor commitments in M&A-led retail consolidation?
Supporting Notes
- Saks Global’s acquisition of Neiman Marcus was finalized as a $2.65-$2.7 billion deal in late 2024, largely debt-financed via high-yield bonds.
- Amazon’s preferred equity investment of $475 million was paired with obligations by Saks to guarantee at least $900 million in payments over eight years through referral fees and launching a storefront “Saks at Amazon.”
- Amazon‟s court filing claims that Saks “continuously failed to meet its budgets,” “burned through hundreds of millions of dollars in less than a year,” and accumulated large debts to retailers and vendors.
- Saks obtained a $1.75 billion DIP financing package to stay operational; U.S. Bankruptcy Judge Alfredo Perez approved an initial access despite objections from Amazon.
- Vendor claims include: Chanel is owed about $136 million; Kering nearly $60 million; Richemont $30 million; other beauty firms tens of millions.
- CEO Marc Metrick stepped down effective January 2, 2026, replaced by Richard Baker in dual leadership roles; shortly thereafter, Geoffroy van Raemdonck was named CEO as part of restructuring.
- Saks operates roughly 71 full-line department stores (33 Saks Fifth Avenue, 36 Neiman Marcus) plus off-price stores like Saks Off 5th; store footprint spans 5.5 million sq ft in 39 properties.