The consumers are still out there': why a bankruptcy for Saks Global may not spell the end

"Every year, the stores down Manhattan's Fifth Avenue dress up their windows at Christmastime. Tourists from all over the world come to gawk at all the glitter, lace, ruffles and bows. Saks's Fifth Avenue location, so iconic that it's embedded in the brand's name, is usually dressed top to bottom during the holidays. In 2023, the store partnered with Christian Dior to display a giant zodiac calendar."

"But in 2024, the show went dark. Saks Fifth Avenue was without its extravagant lights throughout the holiday season, for the first time since the show debuted in 2004. Money was tight that year. The company had just announced a $2.7bn deal to acquire competitor Neiman Marcus. To fund the deal, Saks borrowed $2.2bn. It was a challenging year for luxury, Saks told the New York Post at the time, but the company voiced optimism for the new year."

"After the acquisition, the newly created Saks Global company would oversee three luxury department store brands: Neiman Marcus, Bergdorf Goodman and Saks Fifth Avenue. But just more than a year after this new luxury behemoth was formed, Saks Global on Wednesday announced that it had filed for chapter 11 bankruptcy, amid problems paying off its debts. While filing for chapter 11 bankruptcy doesn't force a company into liquidation, it's a major hit to a brand that was once among the most prestigious in retail."

Manhattan's Fifth Avenue department stores stage elaborate holiday window displays; Saks Fifth Avenue showcased a Christian Dior zodiac calendar in 2023. In 2024 Saks' holiday light show was dark after the company borrowed $2.2bn to help fund a $2.7bn acquisition of competitor Neiman Marcus. The acquisition created a combined Saks Global overseeing Neiman Marcus, Bergdorf Goodman and Saks Fifth Avenue. More than a year later, Saks Global filed for Chapter 11 bankruptcy amid problems paying off debts. The bankruptcy underscores how heavy acquisition-related leverage and changing retail conditions strain traditional brick-and-mortar luxury retailers, while some competitors report revenue growth.

Read at www.theguardian.com