When a company files for Chapter 11 bankruptcy with the intent of remaining a going concern, every aspect of its financial future becomes a negotiation.
Bankruptcy allows a company to negotiate with its creditors, perhaps get out of unfavorable leases, and, in some cases, make a better deal with landlords to keep certain stores open.
In the case of landlords, vendors, and creditors, they have to balance whether forgiving some debt, swapping debt for equity, stretching out payment terms, or renegotiating leases makes sense. Sometimes, especially amid a challenging economy, it’s best for everyone involved to compromise.
When Saks Global filed for Chapter 11 bankruptcy protection on January 14, it did so because it “faced severe liquidity constraints that prevented the company from paying bills and acquiring inventory to meet customer demand, according to court filings,” according to TheStreet’s Kirk O’Neill.
That debt came at least partly because of the company’s decision to borrow $2.2 billion to buy Neiman Marcus, according to GlobalData Managing Director Neil Saunders.
“As soon as you put debt into the equation in this kind of environment, it just crunches your ability to operate,” he told The Guardian.
Now, as part of Saks Global’s bankruptcy process, the chain has decided to close more of its namesake stores, along with select Neiman Marcus locations.
After its Chapter 11 bankruptcy filing, Saks Global shared plans to close eight underperforming Saks Fifth Avenue locations, plus one Neiman Marcus store.
In addition, Saks Global plans to close the five remaining Neiman Marcus Last Call stores and shut down 57 of the 69 Saks OFF 5TH brick-and-mortar locations, according to an earlier report from TheStreet.
Now, the chain has shared another round of planned closures, including 12 Saks Global locations and three Neiman Marcus stores.
There will be 13 Saks Fifth Avenue stores and 32 Neiman Marcus stores remaining after all shutdowns are complete, according to a press release.
Saks Global’s bankruptcy was not a surprise to many vendors.
More Bankruptcy:
“Saks Inc. had a persistent and troubling pattern of paying vendors late in 2025, pointing to sustained liquidity problems,” Ragini Bhalla, head of brand and spokesperson for credit report provider Creditsafe, said in an email analysis of the company sent to TheStreet before the filing.
“Towards the second half of 2025, Saks appeared to be managing its cash flow by deferring payables,” Bhalla said.
Westchester (White Plains, NY) Source: Saks Global
Saks Global has been steadily closing stores under multiple brands.Shutterstock ·Shutterstock
Saunders sees the company’s strongest asset as its real estate.
“They certainly will talk about the intention to be a global retailer, but they also see a group that has very large real estate assets. It owns some of the properties that it trades from in very prime locations,” Saunders told The Guardian. “And they will say, look, if we can’t make the retail bit work, does it really matter?”
That could lead to the company being dismantled, much like Sears was, as former CEO Eddie Lampert sold its real estate while winding down retail operations.
“Their mindset is deal-making, it’s asset monetization,” said Saunders. “It’s not, hey, here are a couple of retail brands that we need to protect, cherish, and grow.”
That’s a view Reuters took as well.
“Saks Global’s prime real estate portfolio could serve as a crucial bargaining chip with lenders as the hard-hit luxury shopping empire navigates its restructuring after filing for bankruptcy,” the news agency reported.
“One of the ways to monetize its portfolio would be through the sale-leaseback option, where Saks could sell its assets to an investor and lease them back to continue making money on the asset, providing it with liquidity and allowing it to keep things running at its stores,” Matt Weko, division president of consumer goods and services at real estate investment adviser JLL, told Reuters.
The chain’s vendors, however, have a vested interest in its survival as a retailer.
“Saks Global Enterprises said hundreds of brands, including Burberry and those owned by luxury powerhouses LVMH and Kering, have either resumed or continued shipping to the troubled retailer as it tries to emerge from bankruptcy,” Bloomberg Law reported.
Reuters shared a blunt assessment of the company’s road ahead.
“Saks must broaden its consumer base to survive bankruptcy,” the wire service shared.
