Saks' Lenders Sensed Doom Spiral Was Worsening After Unsettling CEO Call

Saks Global is preparing to file for bankruptcy in the coming weeks after missing a $100 million interest payment tied to its Neiman Marcus acquisition. The company, which operates Saks Fifth Avenue, Neiman Marcus, and other luxury retail brands, is now in talks with creditors to secure financing for the bankruptcy process.

Leadership at Saks has undergone a significant change as CEO Marc Metrick steps down amid the crisis. Richard Baker, previously the executive chair, is set to replace him. The move comes as the company is reportedly preparing to file for Chapter 11 protection.

Lenders are now grappling with whether to extend a new $1 billion debtor-in-possession loan to keep Saks operating during a potential bankruptcy. Some creditors want to support the company, while others are considering cutting their losses.

Why Did This Happen?

Saks' acquisition of Neiman Marcus in late 2024 added $2.65 billion in debt but failed to resolve the company's underlying financial struggles. The combined entity struggled with paying vendors, and some suppliers stopped shipments due to unpaid invoices. This led to a decline in inventory, further hurting sales and customer traffic.

The company attempted to refinance its debt in August 2025 with a $600 million restructuring. However, this did not prevent the recent missed interest payment, raising alarms among creditors.

What Are Analysts Watching Next?

Analysts are closely watching the outcome of creditor negotiations. A failure to secure a viable financing package could force Saks to consider liquidation. Some creditors are pushing for strict milestones to be included in any financing agreement to ensure accountability.

Moody's analyst Mickey Chadha noted that the acquisition was always a high-risk proposition given Saks and Neiman Marcus's weak sales. The combined company was "on very thin ice from the get go," he said.

How Might This Affect the Luxury Retail Industry?

Saks' potential bankruptcy could signal a broader shift in the luxury retail sector. Competitors like Nordstrom and Bloomingdale's have been gaining traction as luxury shoppers shift away from multibrand department stores.

Suppliers, who have already been impacted by Saks' unpaid invoices, may suffer additional losses if the company enters bankruptcy. Some, like Jovani Fashion Ltd., have already filed lawsuits for outstanding payments.

The situation raises questions about the viability of large-scale retail mergers in the current economic climate. With rising inflation and a weak labor market, the path to profitability for Saks Global appears increasingly difficult.

Richard Baker, the new CEO, will need to navigate these challenges while also managing the company through its restructuring or potential bankruptcy process. He previously served as president of the Saks Fifth Avenue Foundation and has experience in real estate and retail.

As the situation unfolds, investors and creditors will be watching how Saks balances its debt obligations with the need to maintain operations during this transition period. The company's ability to secure a financing package will be critical in determining its next steps.