Saks Global accesses additional $300M in bankruptcy funding
Saks Global’s five-year business plan has won support from a key group.
The luxury retail company unlocked access to an additional $300 million of the $1.75 billion in committed capital it secured in January when it filed for its restructuring in January. Saks Global said it was able to secure the funds following approval of its five-year business plan from a group of senior secured bondholders and the “achievement of other key milestones.”
The key elements of the plan, which assumes growth and profitability fueled by a strong liquidity position, will be included in the company’s reorganization plan. The plan is expected to be filed with the U.S. Bankruptcy Court for the Southern District of Texas within the next several weeks.
The $300 million completes the pre-emergence financing package, providing Saks Global with sufficient liquidity to continue to support operations and advance its transformation as it focuses on serving luxury customers, strengthening brand partner relationships and driving full-price selling, the company said.
In a statement, CEO Geoffroy van Raemdonck said Saks Global has made significant progress over the past two months as it works to position the company for the future, “quickly stabilizing our business, improving inventory flow and investing in our transformation.”
"With continued strong support from our capital partners, we are laying the path to realize the combined full potential of our three banners, achieve double-digit adjusted EBITDA margin and drive profitable and sustainable growth,” he continued.
Since filing for bankruptcy, Saks Global has been downsizing its footprint. The retailer is in the process of closing 20 Saks Fifth Avenue stores and four Neiman Marcus locations. It also is significantly scaling back its off-price presence as it focuses on luxury and full-price retail, closing the majority (57) of Saks Off 5th stores and four Last Call stores.
The retailer is also streamlining its supply chain network, prioritizing three go-forward distribution and service center facilities — in Texas, Pennsylvania and California — which have been significantly invested in over recent years, to support faster shipping, improve the customer experience and drive cost efficiencies.
In addition, Saks Global said it also has been strengthening relationships with its brand partners, leading to a significant acceleration of inventory flow, with shipping resumed by nearly 600 brands releasing $1.4 billion in retail receipts. These efforts have resulted in a nearly 60% increase in merchandise receipts in March month-to-date versus the same period last year.
"This is tremendous progress in a very short period of time," said van Raemdonck. "I'm incredibly proud of our entire leadership team and colleagues across the organization whose collective strength and focus have enabled us to continue to serve our customers and brand partners as we take decisive steps to build a stronger Saks Global. We remain focused on building on this momentum as we work toward emerging later this year.
Saks Global is comprised of Saks Fifth Avenue, Neiman Marcus, Bergdorf Goodman and Saks Off 5th.
