What the Bankruptcy of Saks Means for You

Style|What Does the Saks Bankruptcy Mean for Shoppers?

On Wednesday Saks Global, the parent company of Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman and the largest luxury department store group in America, filed for bankruptcy protection. Though it had been expected for a few months, the news still sent shock waves through the fashion industry. Here is what it could mean for you.

Is this the end of Saks and Neiman Marcus?

No. Saks Global has filed for Chapter 11 bankruptcy protection, not Chapter 7, which means it has too much debt to effectively run its business and is reorganizing under new owners, but it is not liquidating. This is not a Barneys situation. (At least, not yet.)

But it may mean the end of the Saks and Neiman Marcus near you. Retailers often use bankruptcy to get out of expensive leases, and the new owners of the group are expected to close a number of Saks and Neiman stores, as well as about half of the Saks Off Fifth stores. That usually doesn’t begin until about 30 days after the filing.

And it may mean the end of some small designers that sell their clothes directly to department stores like Neiman and Saks and rely on it for the bulk of their revenue.

Whose fault is this?

First people blamed Marc Metrick, the Saks chief executive who resigned earlier this month, for being too highhanded in his relationships with the vendors. Now they are blaming Richard Baker, the man behind the creation of Saks Global.

See, when Saks acquired Neiman Marcus in late 2024, it took on lots of debt. Then, management changed the payment terms for brands that supplied the stores, which meant that the brands started sending fewer products, which meant there was less to sell, which meant there was less money coming in.