As Saks Global races to find a white knight to save its finances, more disgruntled vendors are taking their complaints of nonpayment to court.
Gabriella Rossetti Inc. recently sued Saks Global for failure to pay for or to return consignment goods, while Catherine Regehr Inc. sued the retailer for $110,326.76 in past-due bills.
Designer brands across fashion have been complaining about Saks Global’s past-due bills since before it bought Neiman Marcus Group in a $2.7 billion deal in December 2024. While that transaction was expected to recapitalize the company, the combined business continued to struggle last year and remained on the outs with many vendors, leaving it without enough inventory to grow sales.
The disruption at Gabriella Rossetti could be a sign of what’s to come if Richard Baker, the architect of Saks Global and its newly named chief executive officer, is unable to finesse the company’s finances after it missed a more than $100 million interest payment last month.
The rumor mill has been working overtime as the Saks Global drama reaches what seems to be the climax.
- Baker is said to have met with Jeff Bezos, executive chairman of Amazon, which helped fund the Neiman’s deal, along with Ben Ashkenazy, whose Ashkenazy Acquisition Corp. just bought the land underneath the Neiman Marcus store in Beverly Hills. That could mark the formation of a group that could stabilize Saks Global and keep Baker involved.
- Brand management firm Authentic Brands Group, which already has a joint venture with Saks Global, is said to be interested in the business.
- Private equity firm Apollo was also said to be watching the situation intently, although someone close to the investment giant disputed this, and real estate company Vornado is another name that has popped up.
- The potential for bankruptcy also continues to loom large.
All of the players either did not respond to requests for comment or declined to comment.
Some sources see some kind of a deal with Amazon as the most likely outcome. Amazon, which already houses a Saks shop on its platform, has been keen to expand in luxury for years and playing a role in stabilizing the company could win it some goodwill from designers, who are still wary of the e-commerce giant.
Saks Global certainly has an enormous amount of work to do if it wants to get fashion brands back on its side — as can be seen by the lawsuits filed against the company in New York state court over the past week.
Alison Diboll, founder of Gabriella Rossetti, sued both Saks Global and its former CEO, Marc Metrick, claiming “chronic nonpayment and retention of merchandise.”
Diboll, who is representing herself in the case, said in the filing that her brand sold goods at Saks Global on a “consignment drop-ship basis” that had the retailer listing goods for sale and her business fulfilling the orders.
“Over an extended period, defendants failed to remit payment for merchandise sold on a consistent basis,” the suit said. “Defendants also failed to return customer-returned merchandise as required, preventing plaintiffs from reselling that merchandise in season.”
Diboll started reaching out to Metrick around December 2023, which seemed to help secure payment and the return of merchandise.
Diboll said she spoke with Metrick on the phone in April last year and the CEO “acknowledged the harm caused to plaintiffs and proposed, on his own initiative, a $1.2 million advance purchase order as a stabilization measure for Gabriella Rossetti Inc.”
“In that same call, defendant Metrick also agreed that defendants would return all customer-returned merchandise then in defendants’ possession, without chargebacks or cost to plaintiffs, given that such merchandise had not been returned monthly as previously agreed and could no longer be sold in season,” the suit said. “Defendants paid the outstanding balance approximately one week later but failed to return any customer-returned merchandise, notwithstanding defendant Metrick’s written directive.”
The CEO then stopped responding to any subsequent outreach, the suit said.
“Given [Saks Global’s] dominant position in the luxury multibrand retail market, defendants knew or should have known that such conduct would foreseeably deter investment in fashion brands dependent on timely payment from major retail partners,” the suit said. “As a result, plaintiffs faced significant and foreseeable barriers to securing necessary investment capital, compounding the harm caused by defendants’ failure to pay and return merchandise.”
Likewise, Canadian dress vendor Catherine Regehr Inc. sued Saks Global after it shipped $150,288.76 in merchandise to Saks Global, but was paid just $39,962.
“Saks never rejected any of the goods sold and delivered for, which it has failed to pay as nonconforming or defective and retained such goods for retail sale,” the suit said.
Catherine Regehr’s attorney, Jonathon Warner, did not respond to a request for comment.
Gabriella Rossetti and Catherine Regehr are following in the footsteps of New York designer Jovani Fashion, which sued Saks Global for nonpayment in October. The retailer denied the allegations in court last month.
Given the speed of the legal system and the ticking clock on Saks Global’s interest payment — believed to be in a 30-day grace period now — the larger questions about the company’s finances will likely be answered before any of these cases get their final day in court.
