Saks Global reportedly weighing options, with bankruptcy as ‘last resort’
Saks Global’s debt payment is catching up with it.
The luxury retail and real estate holding company, whose portfolio includes Saks Fifth Avenue, Saks Off 5th, Neiman Marcus and Bergdorf Goodman, is considering options, including as “a last resort” filing for bankruptcy, reported Bloomberg. The move comes as Saks faces a $100 million-plus debt payment that is due by the end of December.
The company has been exploring several alternatives to raise its liquidity and avoid a court-supervised restructuring, including raising emergency financing, selling off assets, and negotiating with lenders for additional liquidity, according to the report. It has also been reassessing the priority of certain debt obligations as part of its broader turnaround efforts.
Earlier this year, Saks creditors lent the company hundreds of millions of dollars more in a debt deal that reconfigured its payment priorities, leading to multiple bondholder tiers, the report said. But those securities have since plunged, the report said.
[READ MORE: S&P downgrades Saks; calls latest financing deal 'tantamount' to a default]
“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, elevated experiences and personalized service to our customers,” a Saks representative told Bloomberg via email in the report.
Saks raised billions of dollars last year to fund its revitalization effort, which included the $2.7 billion purchase of the Neiman Marcus Group as it looked to create a U.S. luxury retail powerhouse. But the deal put the company deeper in debt and it has faced ongoing complaints from suppliers about missed and late payments, according to the report. According to a report by WWD, many brands have discontinued shipping to Saks Global this year.
In October, the Wall Street Journal reported that Saks was in talks to sell a 49% stake in Bergdorf Goodman for about $1 billion.
