January 7, 2026
zhukovsky/Depositphotos.com
What Should Saks Global Try Next?
Saks Global’s CEO, Marc Metrick, stepped down amid bankruptcy rumors as the luxury chain’s merger with Neiman Marcus Group last December failed to quickly set the business on stronger footing.
The Wall Street Journal reported on Dec. 31 that Saks had missed an interest payment on debt tied to its $2.7 billion acquisition of Neiman Marcus.
Richard Baker, executive chairman of Saks Global, last week assumed Metrick’s role while continuing to serve as executive chairman of the company. A former real estate executive, Baker previously ran Canada’s Hudson’s Bay Company and led the formation of Saks Global, the would-be retail empire that includes about 70 locations under the Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman banners — and about 100 Saks Off 5th stores.
Baker said, “I look forward to continuing to work with our highly experienced management team, valued partners, and other stakeholders to secure a strong and stable future for our company.”
Saks Sees Trouble as Luxury Faces Broad Challenges, More Competition
Saks’ troubles come as luxury spending has seen some signs of slowing down amid the pullback toward discretionary spending tied to inflationary pressures, yet the broader business has fared better than other sectors. Third-quarter results for high-end brands helped showed some recovery in the U.S. versus earlier in the year as trade tensions eased and the stock market reached record levels.
The possible bankruptcy filing is being largely blamed on debt taken on with the purchase of Neiman Marcus, which was not only expected to deliver cost synergies, but recapture buying leverage lost. That leverage has been lost as designer and sportswear brands have opened flagships across major urban centers and started selling directly to consumers online.
Luxury players have also lost share to a wide range of newer competitors over the years, including fast-fashion chains and off-pricers. The fallout includes the liquidation of Barneys and bankruptcy of Neiman’s, both in 2020, as well as implosions at Farfetch and Matches.
Saks Hurt By Inventory Shortages, Poor Vendor Relations
Saks’ recent results, however, have been particularly hurt by inventory shortages. Some vendors stopped shipping as the retailer has been slow to pay bills for the last three years. Sales declined 13% in second quarter, which ended Aug. 2.
Last February, Saks began testing its newfound leverage alongside Neiman’s by announcing that as part of “go-forward payment terms,” vendors would be paid 90 days for new orders from receipt of inventory, instead of the traditional 60-day window. It also announced that any past due balances would be covered in 12 installments.
Saks said the 90-day cushion for payments was required for the retailer to compete. Metrick, at the time, cited rising competition, including from its vendors’ DTC expansion, that have led to many luxury stores to exit the marketplace. Spikes in marketing, distribution and fulfilment expenses costs over the years were also brought forward as substantiating reasons.
“We are resetting the multibrand luxury distribution model, not because we feel like it. It’s because the model no longer works,” Metrick told WWD at the time.
He told Vogue Business, “Together as partners, we have to reset the model, or else there won’t be places for brands to distribute product anymore. There are things [brands] don’t fully appreciate right now, like the cost of having your own retail. The capital, staffing and real estate investments you need to make. There’s a reason for multi-branded distribution in the United States. And it was not going to survive under the existing model.”
BrainTrust
Pamela Kaplan
Principal, PK Consulting
Cathy Hotka
Principal, Cathy Hotka & Associates
Jeff Sward
Founding Partner, Merchandising Metrics
Recent Discussions
Discussion Questions
Is the ‘multibrand luxury distribution model’ broken? How should Saks Global be looking to reposition itself?
What does Saks have to do to encourage more vendors to support its restructuring efforts?
Poll
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Financial uncertainty is very dangerous for Saks Global. “Slow to pay bills for the last three years” could deter even the most ardent vendor partners. Job One should be concentrating on the financial basics.
In the LUX business, “financial uncertainty/ leveraged debt/ unstable business” is not attractive to the CONSUMER either. The very customer Saks Global wants (en masse) is extremely financially literate. (And may be savvy in retail biz as an investor.)
If the high level CX perks are tied to owning a dept store credit card & $$ spend, what high end customer wants to be on the losing side?
As well, the Personal Assistants who do shopping for their clients, do not want to be on the hook for $$$ when return policies change overnight; local store closes/ reduces hours. And knowing the assortment will be from brands willing to roll financial dice… but not the small, up coming DESIGNERS.
What Should Saks Global Try Next?
An apology
For someone who was in luxury retail for over 20 years, reading this article makes me so mad – why does Saks act like they are the victim?! Department stores for years took advantage of the brands with their charge backs. They could do this because the brands had no choice. Well the tides have turned and the brands no longer need or want to play by the Department stores rules anymore. Saks needs to own what they created.
With that said, I don’t think multi brand retail is inherently broken, but the economics and partnerships are. If Saks wants to reposition itself, it needs to clearly define what differentiated value it brings to brands beyond distribution, and how risk and margin are shared more equitably.
This isn’t 15+ years ago when Luxury brands thought the www was too gauche, uncultured to sell DTC. Which really didn’t make sense even then, as their customer is the most globally mobile & attached to tech.
The model doesn’t work anymore. High debt load limits the ability to invest in stores or make timely vendor payments. Consumer purchase behavior, waning aspirational spending, and DTC initiatives are disrupting traditional product flow, share, and margins.
High debt load limits the ability to invest in reshaping Consumer purchase behavior.
Red Flags waving, when the consumer is no longer even in the business discussion.
Survival mode= downshift to narrow focus on finance (all sides) and then real estate.
Here is what happens. The vendors will remain very cautious because they know… Eventually, Saks declares Chapter 11. In the reorganization, the equity holders are wiped out. The group of private equity lenders gains control of the equity. They legally loot the company as per the P/E model.
Twenty or thirty years ago, Metrick’s statements at the end of the article would have been arrogant. But just normal, everyday department store arrogant. In today’s market they are over the top…waaaaaaaay over the top. Sak’s has lost the credibility to use the word “partner”. “Together as partners”…give me a break. I think brands absolutely do know what kind of investment it takes to run luxury retail. That’s exactly why they like being a wholesale partner. It’s an equation that works for everone…wholesaler, retailer, and customer. The model didn’t break, the math did! Sak’s took on that debt knowing full well that they had about a molecules worth of wiggle room to make it all work. And why? To put Sak’s and Neiman’s under one roof? Why? What problem did that solve? What market efficiency did that create? We can only hope that they do not break the Sears record of being the worlds longest liquidation sale. I am rooting for the Sak’s and Neiman’s brands to survive, but it’s tough to see how that happens with both debt and equity holders coming out of this with 100 cents on the dollar.
I wouldn’t say the multibrand luxury distribution model is inherently broken, but it is under stress from a complex mix of macro pressures, evolving consumer expectations, and competitive intensity from digitally native players and experience-led luxury platforms. Saks Global’s recent CEO departure and the possibility of a Chapter 11 filing to refresh the balance sheet and debt load may, counterintuitively, be a catalyst for confidence among suppliers and the broader industry. A well-executed restructuring can clarify strategy, reduce financial drag, and signal that the banner is serious about modernizing both operations and its value proposition. In an era where luxury consumers expect seamless, personalized experiences across channels, legacy models that rely predominantly on traditional wholesale economics and static store formats simply don’t match up to the agility of competitors who are blending high-touch service with data-driven relevance.
To reposition effectively, Saks needs to articulate a compelling future that gives vendors confidence that the brand is more than a transactional distribution channel — that it’s a platform for growth, experience, and differentiation. That means not just fixing balance-sheet issues, but investing in technology and personalized experiences that let customers feel uniquely served, whether online or in-store. Luxury shoppers now expect curated journeys backed by predictive insights, real-time inventory visibility, and bespoke services — all powered by intelligent systems that can elevate discovery and deepen loyalty. If Saks can combine its heritage and retail footprint with a data-enabled, customer-centric digital suite, it will be better positioned to compete with both traditional rivals and digitally native luxury models.
Encouraging vendor support for restructuring will hinge on a credible strategy, transparency, and shared upside. Vendors want to see a future where their products are showcased in ways that drive sell-through and premium brand equity, not just on a discounted rack. Clear plans for differentiated merchandising, enhanced loyalty value, richer customer insights, and cooperative marketing investments will signal that Saks isn’t just surviving but evolving into a leadership position in luxury retail. In that context, the combination of a strategic reset, operational clarity, and innovative, tech-enabled experiences could be exactly what revitalizes confidence among suppliers, customers, and the market at large.
I fear the time for true vendor support has passed.
In theory, re-org can be a catalyst for confidence…
BUT… Pre-Acquisition Debt. Even before buying Neiman Marcus, Saks (under HBC) had debt, including a $1.3 billion loan that needed refinancing by late 2024.
$1.3B + $2.2B does not = 0
add to that the decision to go against the grain… spin off Saks.com from stores, with no known benefit to retail sales.
Mgmt credibility: lacking.
The department store is not dead. The mall isn’t dead. All our jobs weren’t shipped to China. PE and stockholder excavating killed Sears, ToysRUs, Lord & Taylor, HBC, and soon Saks. This is capitalism without accoutability. Gordon Gekko foreshadowed this personality profile who feeds on these deals in 1987 – “Because it’s wreckable”. I wrote a heck of a lot about this in my LinkedIn newsletter yesteray. https://www.linkedin.com/posts/bobphibbs_weve-been-told-for-40-years-that-all-our-activity-7414683977606762496-unEc
Vendor relations are the lifeblood of a retailer (or any business that buys and distributes “other people’s merch”). Terms must be very vendor-friendly, with favorable terms, to give vendors confidence to do business with the retailer. A reorg allows a company to clean up some finances, get out of bad leases, and more, which could breathe some life into a retailer, giving them a chance of coming back.
First and foremost, Saks needs an infusion of cash and to restructure its debt. Without this, it cannot survive the short and medium term. Bankruptcy could be one route to achieve this, so too could selling of assets. When this has been done, it should focus on rebuilding supplier relationship and getting back to the basics of retail. It should do these things but I suspect it won’t do these things!
Saks Global sold the land of NM store in Beverly Hills to Ashkenazy Acquisition Corp for undisclosed price, though market sources suggest it was likely over $100 million.
So, if that roughly covers the missed debt payment.
Now what? Their credit rating keeps downgrading.
Mgmt must be thinking they need to shake off the vendor debt… but does that lead to ultimate retail merchandise demise?
Not sure hindsight is needed, to see that $1.3B in debt was bad enough (pre buying NM/BG business). M&A fever is not consumer first.
More Discussions
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Are traditional department stores winning or losing?Is Target’s Michael Fiddelke Focused on the Right Four Priorities?
Has Fiddelke noted the right priorities to turn Target around?
Financial uncertainty is very dangerous for Saks Global. “Slow to pay bills for the last three years” could deter even the most ardent vendor partners. Job One should be concentrating on the financial basics.
In the LUX business, “financial uncertainty/ leveraged debt/ unstable business” is not attractive to the CONSUMER either. The very customer Saks Global wants (en masse) is extremely financially literate. (And may be savvy in retail biz as an investor.)
If the high level CX perks are tied to owning a dept store credit card & $$ spend, what high end customer wants to be on the losing side?
As well, the Personal Assistants who do shopping for their clients, do not want to be on the hook for $$$ when return policies change overnight; local store closes/ reduces hours. And knowing the assortment will be from brands willing to roll financial dice… but not the small, up coming DESIGNERS.
An apology
For someone who was in luxury retail for over 20 years, reading this article makes me so mad – why does Saks act like they are the victim?! Department stores for years took advantage of the brands with their charge backs. They could do this because the brands had no choice. Well the tides have turned and the brands no longer need or want to play by the Department stores rules anymore. Saks needs to own what they created.
With that said, I don’t think multi brand retail is inherently broken, but the economics and partnerships are. If Saks wants to reposition itself, it needs to clearly define what differentiated value it brings to brands beyond distribution, and how risk and margin are shared more equitably.
This isn’t 15+ years ago when Luxury brands thought the www was too gauche, uncultured to sell DTC. Which really didn’t make sense even then, as their customer is the most globally mobile & attached to tech.
The model doesn’t work anymore. High debt load limits the ability to invest in stores or make timely vendor payments. Consumer purchase behavior, waning aspirational spending, and DTC initiatives are disrupting traditional product flow, share, and margins.
High debt load limits the ability to invest in reshaping Consumer purchase behavior.
Red Flags waving, when the consumer is no longer even in the business discussion.
Survival mode= downshift to narrow focus on finance (all sides) and then real estate.
Here is what happens. The vendors will remain very cautious because they know… Eventually, Saks declares Chapter 11. In the reorganization, the equity holders are wiped out. The group of private equity lenders gains control of the equity. They legally loot the company as per the P/E model.
Twenty or thirty years ago, Metrick’s statements at the end of the article would have been arrogant. But just normal, everyday department store arrogant. In today’s market they are over the top…waaaaaaaay over the top. Sak’s has lost the credibility to use the word “partner”. “Together as partners”…give me a break. I think brands absolutely do know what kind of investment it takes to run luxury retail. That’s exactly why they like being a wholesale partner. It’s an equation that works for everone…wholesaler, retailer, and customer. The model didn’t break, the math did! Sak’s took on that debt knowing full well that they had about a molecules worth of wiggle room to make it all work. And why? To put Sak’s and Neiman’s under one roof? Why? What problem did that solve? What market efficiency did that create? We can only hope that they do not break the Sears record of being the worlds longest liquidation sale. I am rooting for the Sak’s and Neiman’s brands to survive, but it’s tough to see how that happens with both debt and equity holders coming out of this with 100 cents on the dollar.
I wouldn’t say the multibrand luxury distribution model is inherently broken, but it is under stress from a complex mix of macro pressures, evolving consumer expectations, and competitive intensity from digitally native players and experience-led luxury platforms. Saks Global’s recent CEO departure and the possibility of a Chapter 11 filing to refresh the balance sheet and debt load may, counterintuitively, be a catalyst for confidence among suppliers and the broader industry. A well-executed restructuring can clarify strategy, reduce financial drag, and signal that the banner is serious about modernizing both operations and its value proposition. In an era where luxury consumers expect seamless, personalized experiences across channels, legacy models that rely predominantly on traditional wholesale economics and static store formats simply don’t match up to the agility of competitors who are blending high-touch service with data-driven relevance.
To reposition effectively, Saks needs to articulate a compelling future that gives vendors confidence that the brand is more than a transactional distribution channel — that it’s a platform for growth, experience, and differentiation. That means not just fixing balance-sheet issues, but investing in technology and personalized experiences that let customers feel uniquely served, whether online or in-store. Luxury shoppers now expect curated journeys backed by predictive insights, real-time inventory visibility, and bespoke services — all powered by intelligent systems that can elevate discovery and deepen loyalty. If Saks can combine its heritage and retail footprint with a data-enabled, customer-centric digital suite, it will be better positioned to compete with both traditional rivals and digitally native luxury models.
Encouraging vendor support for restructuring will hinge on a credible strategy, transparency, and shared upside. Vendors want to see a future where their products are showcased in ways that drive sell-through and premium brand equity, not just on a discounted rack. Clear plans for differentiated merchandising, enhanced loyalty value, richer customer insights, and cooperative marketing investments will signal that Saks isn’t just surviving but evolving into a leadership position in luxury retail. In that context, the combination of a strategic reset, operational clarity, and innovative, tech-enabled experiences could be exactly what revitalizes confidence among suppliers, customers, and the market at large.
I fear the time for true vendor support has passed.
In theory, re-org can be a catalyst for confidence…
BUT… Pre-Acquisition Debt. Even before buying Neiman Marcus, Saks (under HBC) had debt, including a $1.3 billion loan that needed refinancing by late 2024.
$1.3B + $2.2B does not = 0
add to that the decision to go against the grain… spin off Saks.com from stores, with no known benefit to retail sales.
Mgmt credibility: lacking.
The department store is not dead. The mall isn’t dead. All our jobs weren’t shipped to China. PE and stockholder excavating killed Sears, ToysRUs, Lord & Taylor, HBC, and soon Saks. This is capitalism without accoutability. Gordon Gekko foreshadowed this personality profile who feeds on these deals in 1987 – “Because it’s wreckable”. I wrote a heck of a lot about this in my LinkedIn newsletter yesteray. https://www.linkedin.com/posts/bobphibbs_weve-been-told-for-40-years-that-all-our-activity-7414683977606762496-unEc
Vendor relations are the lifeblood of a retailer (or any business that buys and distributes “other people’s merch”). Terms must be very vendor-friendly, with favorable terms, to give vendors confidence to do business with the retailer. A reorg allows a company to clean up some finances, get out of bad leases, and more, which could breathe some life into a retailer, giving them a chance of coming back.
First and foremost, Saks needs an infusion of cash and to restructure its debt. Without this, it cannot survive the short and medium term. Bankruptcy could be one route to achieve this, so too could selling of assets. When this has been done, it should focus on rebuilding supplier relationship and getting back to the basics of retail. It should do these things but I suspect it won’t do these things!
Saks Global sold the land of NM store in Beverly Hills to Ashkenazy Acquisition Corp for undisclosed price, though market sources suggest it was likely over $100 million.
So, if that roughly covers the missed debt payment.
Now what? Their credit rating keeps downgrading.
Mgmt must be thinking they need to shake off the vendor debt… but does that lead to ultimate retail merchandise demise?
Not sure hindsight is needed, to see that $1.3B in debt was bad enough (pre buying NM/BG business). M&A fever is not consumer first.