On a chilly January morning in New York City, the iconic Saks Fifth Avenue flagship store still drew window shoppers and tourists with its glittering displays of luxury handbags and perfumes. But beneath the surface, a storm was brewing—one that would soon shake the very foundation of American luxury retail. On January 13, 2026, Saks Global, parent company of Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman, filed for Chapter 11 bankruptcy protection in what is already being called one of the largest retail collapses since the pandemic, according to Reuters.
This dramatic turn of events comes barely a year after Saks’ parent, Hudson’s Bay Company (HBC), merged Saks Fifth Avenue with its longtime rival Neiman Marcus in a $2.7 billion deal. The merger, which also brought Bergdorf Goodman under the Saks Global umbrella, was supposed to create a luxury retail powerhouse capable of weathering economic storms and competing with both online giants and the brands themselves. The plan, as executives pitched it, was to cut costs and bolster the brands’ combined strength. But as the dust settles, it’s clear that the gamble didn’t pay off.
In its bankruptcy filing in Houston, Texas, Saks Fifth Avenue listed between $1 billion and $10 billion in assets and liabilities. The company estimated it has between 10,001 and 25,000 creditors, including some of the world’s most prestigious luxury brands. According to court documents reviewed by Reuters, Chanel and Gucci owner Kering are owed approximately $136 million and $60 million, respectively, while LVMH, the world’s largest luxury conglomerate, is owed $26 million. The list of unsecured creditors reads like a who’s who of high fashion—a telling sign of the depth of Saks’ financial woes.
To keep its stores open and operations running, Saks Global scrambled to secure a $1.75 billion financing package, including a $1 billion debtor-in-possession loan from Pentwater Capital Management and Bracebridge Capital, as reported by BBC and CNN. An additional $250 million in asset-backed financing was made available through the company’s banks, and another $500 million is promised upon Saks’ successful exit from bankruptcy. Amazon and Authentic Brands, both equity investors in the 2024 merger, were also listed in the bankruptcy court filings.
But the roots of this crisis go deeper than a single merger gone awry. Retail analysts and industry insiders point to a confluence of factors—some stretching back more than a decade. Mark Cohen, former head of retail studies at Columbia Business School, told BBC, “This company has exhibited all of the characteristics of a train wreck.” He argued that leadership’s focus on deal-making, rather than the core health of the business, ultimately harmed Saks’ long-term prospects.
Even before the Neiman Marcus acquisition, Saks was showing signs of strain. The department store began reporting double-digit quarterly sales declines as early as 2023, with shoppers increasingly drawn to e-commerce rivals and direct-to-consumer offerings from luxury brands. “A lack of cash meant suppliers went unpaid, this created inventory gaps which then drove customers away and caused revenue and cash generation to plummet. This classic vicious spiral put the business in an unsustainable position,” retail analyst Neil Saunders wrote in a note to clients, as cited by CNN.
The merger with Neiman Marcus, itself recently emerged from bankruptcy, only intensified these challenges. Saks took on roughly $2.2 billion in debt to fund the deal, missing a $100 million interest payment to creditors in late December 2025. The missed payment triggered alarm bells throughout the luxury industry, with vendors complaining of months-long payment delays and some halting shipments altogether. One vendor, speaking anonymously to BBC, said his company was still owed at least $20,000 for shipments sent out last year, with more than $35,000 in unfilled orders held up since October 2025. “Even though we had two or three issues like this in the past, this time, the answer of, ‘Let’s cancel the orders’, seems to be a desperate move. Nothing they do makes any sense,” the vendor said.
For customers, the financial turmoil has been felt in the form of empty shelves and cancelled orders. Penelope Nam-Stephen, a loyal Saks shopper, found the entire Diptyque fragrance line out of stock at both the Boston and New York locations after Christmas. Richard Browne, a longtime online customer, placed an order for discounted Michael Kors jeans on January 1, only to receive an apologetic email the next day: “We needed to cancel your order.” Browne told BBC, “It was just frustrating that I had spent the time to find an order, and then they said, ‘We’re sorry, tough luck.’” He admitted he’s now “less likely” to shop at Saks.
The cash crunch led Saks to sell off assets, including a prized Beverly Hills property, in a bid to raise funds. But these efforts failed to stem the tide. In October, the company slashed its full-year financial outlook, blaming falling sales and inventory challenges. Tensions with vendors escalated after a February 2025 letter from then-CEO Marc Metrick promised overdue payments would be made in 12 installments—a move that did little to reassure anxious brands. By November, finance firm Hilldun, which guaranteed orders for about 130 brands working with Saks, announced it would stop approving new orders, a clear sign of eroding confidence.
Leadership turmoil only added to the uncertainty. Metrick abruptly resigned in early January 2026 after the missed debt payment, replaced by Richard Baker, Saks’ executive chairman and architect of the Neiman Marcus deal. But the revolving door kept spinning: Baker is now stepping down, with Geoffroy van Raemdonck, former Neiman Marcus chief, taking the helm for the bankruptcy proceedings. In a statement, van Raemdonck said, “This is a defining moment for Saks Global, and the path ahead presents a meaningful opportunity to strengthen the foundation of our business and position it for the future. In close partnership with these newly appointed leaders and our colleagues across the organization, we will navigate this process together with a continued focus on serving our customers and luxury brands.”
Saks’ collapse is emblematic of the broader upheaval facing department stores in the U.S. Macy’s shuttered hundreds of locations in 2024, and Lord & Taylor vanished from the landscape in 2020. Meanwhile, luxury shoppers have become more discerning, often bypassing department stores altogether in favor of buying directly from brands. Add to this a sluggish economy—marked by a slowing job market and shaky consumer sentiment—and it’s little wonder Saks found itself in dire straits. A recent CNN poll found that a majority of Americans blamed the White House for harming the economy, underscoring just how fraught the retail environment has become.
As Saks Global enters bankruptcy, its future—and the fate of its storied brands—hangs in the balance. While the company insists its stores will remain open during the restructuring, analysts and vendors remain skeptical. The luxury retail world is watching closely, wondering whether Saks can reinvent itself or if this chapter will mark the end of an era on Fifth Avenue and beyond.
