Saks Global nearing $1.75 billion financing plan ahead of bankruptcy filing: report

Beleaguered luxury retailer Saks Global is close to finalising $1.75 billion in financing with creditors that would allow its iconic Saks Fifth Avenue, Bergdorf Goodman and Neiman Marcus stores to remain open, two people familiar with the negotiations said. The department store conglomerate wants to reorganize its debt and operations in Chapter 11 bankruptcy, which it could file "imminently", the people said.

The financing would provide an immediate cash infusion of $1 billion through a debtor-in-possession loan from an investor group led by Pentwater Capital Management in Naples, Florida, and Boston-based Bracebridge Capital, the people said. The company's banks would also provide an additional $250 million in financing through an asset-backed loan, the people said, asking not to be identified because the discussions are private.

A DIP loan helps companies pay salaries, vendors, and other ongoing expenses while a company undergoes Chapter 11 bankruptcy, allowing it to continue operating while reorganising its business. DIP financing gives investors priority repayment if the company is unsuccessful and has to liquidate, so a bankruptcy judge must approve it.

Saks Global, which controls stores and brands that have helped shape America's taste for high fashion over the last century, would have access to another $500 million of financing from the investor group once it successfully exits bankruptcy protection, the sources added.

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The negotiations are still fluid, and the exact terms of the lending package could change, they cautioned. The financing plan would also need approval from a bankruptcy judge before it is finalised. The filing could come as soon as Tuesday, the people said. The DIP finance package would allow Saks Global to repay its vendors and restock depleted inventory.

One of the people said, A Chapter 11 reorganisation allows it to continue operating as it restructures its finances and renegotiates lease agreements and other contracts. The so-called DIP loan could eventually be converted into equity or another type of asset, instead of repaid, if Saks successfully emerges from bankruptcy, one of the people said.

PJT Partners, which is advising Saks on its restructuring, declined to comment. Saks did not immediately return a request for comment.

A LUXURY DREAM THAT FAILED

Driven by the vision of real estate investor Richard Baker, Canada-based conglomerate Hudson's Bay Co, which had owned Saks since 2013, bought rival Neiman Marcus in 2024 for $2.65 billion and spun off its US luxury assets to create Saks Global. The plan was to more easily take on competitors like Bloomingdale's and Nordstrom by bringing together two of America's best-known department store chains.

Big names such as Amazon and Salesforce backed the Saks Global deal by becoming equity investors. While the marriage gave the newly formed luxury conglomerate more leverage to negotiate discounts with vendors, it also left it saddled with debt. Saks Global took on about $2.2 billion in fresh debt as part of the deal, targeting $600 million in annual cost savings, according to media reports citing the company's investor call in October.

But demand for luxury goods didn't rebound as hoped for in 2025 and the servicing costs on that debt significantly ate into its cash flow, making it late in paying vendors and investors, according to interviews with former vendors, investors and analysts. Saks Global had to tap investors for another $600 million in June and missed a crucial bond payment last month.

Some of Saks' bonds are trading at as little as a penny on the dollar. Its first lien bonds, which have the most protection in bankruptcy, are trading at 25 cents to 30 cents, one bond investor told Reuters. The new cash injection should give Saks enough breathing room and liquidity to eventually recover, one investor said.

It wasn't clear whether the restructuring plan would include additional changes to the company's management team or its storied real estate holdings, which include its flagship Saks Fifth Avenue store in New York City. The company abruptly replaced its chief executive – veteran retail executive Marc Metrick – earlier this month, elevating Baker to CEO.