"In late 2024, Saks Global executive chair and controlling shareholder Richard Baker, a real estate scion, landed his dream trophy in Neiman Marcus (which also owned Bergdorf), achieving his long-held ambition to combine the U.S.'s fanciest luxury department stores into one company. To pull this off, Saks Global borrowed $2.7 billion, an untenable debt load that has put the company on the precipice of a bankruptcy protection filing, or at least a major refinancing."
"The Saks-Neiman tie-up was the culmination of a plan Baker hatched in 2005 to snap up retailers with valuable real estate. Over the years, different iterations of the company, known for years as HBC, have included Lord & Taylor (his first big acquisition), and Canada's Hudson's Bay. His bet was that the value of iconic properties like the Saks and Lord & Taylor flagships in Manhattan or The Bay in Toronto could be monetized so long as the underlying retail business remained steady."
"But nothing about retail, especially department stores, has been stable. Lord & Taylor shut all its stores in 2019 after HBC sold the weakened retailer, and Hudson's Bay in Canada liquidated last year, ending its 355-year run. To be fair, Baker has made some good deals in the world of retail. (He sold Target the locations of its ill-fated Canadian expansion in 2011.) And department stores have been cratering for decades."
Saks Global is a one-year-old holding company combining Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman. Richard Baker acquired Neiman Marcus in late 2024, completing his plan to merge marquee luxury department stores. Saks Global borrowed $2.7 billion to finance the deal, creating an untenable debt load that risks bankruptcy protection or major refinancing and weakens retail prospects. Baker’s long-term strategy focused on monetizing valuable flagship real estate through acquisitions. Department stores have been unstable: Lord & Taylor closed in 2019 and Hudson’s Bay liquidated after 355 years. Financial maneuvers provided limited benefit and did not replace needed retail investment.
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