Luxury retailer Saks Global is planning to file for Chapter 11 bankruptcy as soon as Sunday, Bloomberg News reported Friday, citing people familiar with the matter.
The owner of New York’s century-old Fifth Avenue flagship store is preparing to file for bankruptcy without a restructuring deal in place, though it aims to craft one in the coming weeks, according to the report.
The company is also in advanced discussions on a $1.25 billion debtor-in-possession financing package with creditors, which would allow it to keep its business running during bankruptcy and pay vendor dues, the Bloomberg report said.
Saks Global did not immediately respond to a Reuters request for comment.
The insolvency caps years of mounting pressures for a retailer loved by movie stars and royals, including Gary Cooper and Grace Kelly.
Faced with rising competition from online outlets and brands’ desire to sell through directly owned stores, Saks Fifth Avenue’s parent, Hudson’s Bay Company, bet on scale by merging with rival Neiman Marcus in 2024 to create Saks Global.
The deal, aimed at creating a luxury powerhouse, saddled the new group with debt amid a global luxury sales slowdown.
Under the proposed debtor-in-possession financing, major creditors would provide about $1 billion in new funds to support the bankruptcy process, according to the Bloomberg report.
Lenders could add $250 million by rolling up existing loans, and noteholders may inject another $500 million after the company emerges from bankruptcy, though talks continue, the report added.
