Saks fights landlord to keep Stanford Shopping Center location open

"By Jonathan Randles, Bloomberg Bankrupt luxury retailer Saks Global Enterprises is moving to block Simon Property Group from closing two locations in California and New York, a clash that exposes a widening rift between one of the nation's largest mall owners and one of its most prominent anchor tenants. Simon is seeking to take over a Saks location at the Stanford Shopping Center in Palo Alto, California and a Saks OFF Fifth discount store at an outlet mall in Woodbury, New York."

"Simon has decided that it can make more money on certain of the leases by reletting them at higher rates, said Saks in its court filing. By forcing Saks to withdraw from two currently operating stores, Simon would harm the business and prevent any possibility of selling these valuable leases to raise money that would benefit all company creditors, the retailer said."

"Before the bankruptcy filing, Saks and Simon had a close business relationship. Simon invested $100 million in December 2024 to support Saks' acquisition of Neiman Marcus, according to court papers. Saks Global is also Simon's sixth largest anchor tenant by leased square-footage, according to a January report by Bloomberg Intelligence. Simon has decided that it can make more money on certain of the leases by reletting them at higher rates, said Saks in its court filing."

Saks Global Enterprises seeks a court order to stop Simon Property Group from taking over two Saks locations in Palo Alto, California and Woodbury, New York. Simon alleges Saks failed to pay rent and other costs shortly before Saks filed for Chapter 11 on Jan. 13. Saks maintains lease provisions allow time to repay disputed charges for common-area maintenance, taxes and utilities and invokes the bankruptcy stay to prevent disruption. Simon invested $100 million in December 2024 to support Saks' Neiman Marcus acquisition and counts Saks as a major anchor tenant. Senior noteholders and an unsecured creditors committee support Saks and oppose Simon's request. Simon contends reletting could yield higher rents; Saks argues forced closures would harm operations and limit options to monetize leases for creditors.

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