US company Saks weighs bankruptcy a year after raising billions for turnaround
Saks Global Enterprises, facing limited options ahead of a more than $100 million debt payment due at the end of this month, is considering Chapter 11 bankruptcy as a last resort, according to people with knowledge of the situation.
The company is also weighing additional ways to shore up liquidity, including raising emergency financing or selling assets, the people said, asking not to be identified because they're not authorised to speak publicly. Separately, some Saks lenders have held confidential talks in recent days to assess the company's cash needs, according to other people familiar with the matter. Those discussions have focused on a potential debtor-in-possession loan, a form of bankruptcy funding.
Saks raised billions of dollars from bond investors late last year to finance a bold turnaround plan centered on the acquisition of Neiman Marcus, betting that scale would revive the struggling luxury retailer. Instead, the deal deepened the company's debt burden and failed to resolve long-running issues with vendors, many of whom halted shipments amid missed payments, accelerating losses.
In June, Saks persuaded creditors to provide hundreds of millions of dollars more as part of a debt deal that reshuffled repayment priorities, creating multiple tiers of bondholders with differing claims on the company's assets. Even those securities have since plunged, underscoring concern among investors that the turnaround effort is running out of time.
"Together with our key financial stakeholders, we are exploring all potential paths to secure a strong and stable future for Saks Global and advance our transformation while delivering exceptional products and personalised service to our customers," a representative for Saks said via email.
The company is also weighing additional ways to shore up liquidity, including raising emergency financing or selling assets, the people said, asking not to be identified because they're not authorised to speak publicly. Separately, some Saks lenders have held confidential talks in recent days to assess the company's cash needs, according to other people familiar with the matter. Those discussions have focused on a potential debtor-in-possession loan, a form of bankruptcy funding.
Saks raised billions of dollars from bond investors late last year to finance a bold turnaround plan centered on the acquisition of Neiman Marcus, betting that scale would revive the struggling luxury retailer. Instead, the deal deepened the company's debt burden and failed to resolve long-running issues with vendors, many of whom halted shipments amid missed payments, accelerating losses.
In June, Saks persuaded creditors to provide hundreds of millions of dollars more as part of a debt deal that reshuffled repayment priorities, creating multiple tiers of bondholders with differing claims on the company's assets. Even those securities have since plunged, underscoring concern among investors that the turnaround effort is running out of time.
"Together with our key financial stakeholders, we are exploring all potential paths to secure a strong and stable future for Saks Global and advance our transformation while delivering exceptional products and personalised service to our customers," a representative for Saks said via email.
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