Saks Heads to Court Amidst Unresolved Debt Issues

Saks, closer and closer to bankruptcy. The U.S. luxury department store company is moving towards Chapter 11. The filing will take place in the next few days.

Saks has not yet prepared the restructuring agreement, with the intention of drafting it in the coming weeks. Market sources told Bloomberg that the bankruptcy would be declared this week, although Saks’ plans are constantly changing.

The U.S. company is reportedly in advanced talks with its creditors to obtain a financing package of approximately $1.25 billion under a debtor-in-possession (DIP), as part of the bankruptcy process. This type of financing would allow the company to continue operating during the bankruptcy process and to catch up with its overdue payments to its suppliers.

Mark Metrick, Richard Baker and Ian Putman leave the company

However, the talks have not borne fruit in recent weeks, with shareholders discouraged by the company’s critical financial situation and the management team, whose members have been leaving the group. Earlier this month, CEO Mark Metrick resigned. Executive Chairman Richard Baker, who replaced Metrick, is also leaving the company. The latest departure is that of Ian Putman, president.

Saks’ situation has been dragging on. Over the past year,the company attempted to sell a minority stake in Bergdorf Goodman, as well as some of its assets, such as a property in Beverly Hills. In August, Saksreached an agreement with its creditors to refinance $600 million, which forced them to take losses and saved it from bankruptcy.

By the end of 2025, before defaulting on the $100 million-plus interest payment due in December, Saks had evaluated other options to shore up its liquidity, such as emergency financing or asset sales.

In July, the company announced first quarter results for the year where it reported a net loss of $232 million, up from a net loss of $184 million in the first quarter of 2024, excluding Neiman Marcus.