Saks Global Plans $1 Billion Stake Sale in Bergdorf Goodman

Saks reorganizes its portfolio. The luxury department store chain is looking for a buyer to divest 49% of the capital of the New York chain Bergdorf Goodman to alleviate the debt it accumulates. The stake would be valued at $1 billion, according to The Wall Street Journal.

Saks’ intention is made public less than a year after it closed the acquisition of Neiman Marcus Group, which operated Bergdorf. Saks CEO Richard Baker reportedly confirmed the willingness to sell “a minority stake” in order to “generate value for shareholders”.

At the moment, the sale has four possible buyers. Although the names have not been disclosed, they would be strategic investors and sovereign wealth funds from the Middle East. The company’s indebtedness began to become notorious following the purchase of Neiman Marcus last year for $2.7 billion.

Saks has reportedly offered the minority stake to Middle Eastern investors and funds

Dragged down by the global luxury crisis, Saks managed in August to restructure its debt with $600 million in new financing from lenders.The decision to sell the stake, however, would have been made in recent months since, in June, the department store chain announced the start of preliminary talks to expand Bergdorf Goodman, ruling out its sale. At that time, there were already Middle Eastern funds interested in this asset.

Over time, Saks has been weaving a network of partners in its plan to turn around luxury retail, with the participation of Amazon, Salesforce and G-Apparel Group in the acquisition of Neiman Marcus.In addition, the company has established a strategic consortium with Authentic Luxury Group and Authentic Brands Group, which includes brands such as Barneys New York, Judith Leiber Couture and Hervé Léger.

The group has also explored new distribution avenues to expand its omnichannel presence, such as the launch of a men’s collection with the Saks Fifth Avenue brand at Costco through Centric Brands.