The holiday season is always make or break in retail — but that goes doubly so for Saks Global this year.
The retailer closed on its $2.7 billion deal to buy Neiman Marcus Group just two days before Christmas last year, launching both into a new era.
Chief executive officer Marc Metrick has been rushing to reset the company and luxury retail. He’s made rapid progress, cutting annual costs by $200 million already and integrating the backends of the two businesses.
But more so, it’s been a year of financial strain — from a bondholder freakout over the summer when investors realized their debt wasn’t directly secured by the famous Fifth Avenue flagship to continued strains with vendors who are being very careful in what goods they ship.
The result is a department store group that is still striving toward the future of shopping while dragging along a debt load of $4.9 billion.
In addition to all the consolidation to bring the two retailers together, there’s also been a management shakeup with the departure of Emily Essner, president and chief commercial officer; Bill Bine, chief transformation officer, and Rob Brooks, chief operating officer.
It remains to be seen what Santa brings for Saks Global this year, but there are still six weeks to go until Christmas. Here, three ways the holiday might play out and shape the retailer’s path into 2026 — from the grinchiest, most speculative scenario to where the retailer gets everything on its wish list.
Too Little, Too Late
Saks Global has been on a high wire for some time — slow on payments to vendors for years, squaring off with bondholders before a high-profile refinancing in August, contending with slowing sales and more.
The company is broadly the creation of executive chairman Richard Baker and has worked as well as it has because Baker is a very adept dealmaker. Many thought it was impossible that Saks Global could ever buy Neiman’s.
But even Baker can do the impossible only so many times.
If Christmas falls flat for Saks Global and there’s not enough from asset sales to make a difference, experts around the industry speculate that Saks could eventually face an existential change in ownership, either in or out of bankruptcy court.
Debt watchdog Standard & Poor’s gave Saks Global an ultralow CCC rating after its refinancing and projected the company would see a $500 million deficit in reported free cash flow this year.
Interest expense alone totals about $400 million through next September, according to the rating agency.
If the company did file or make some kind of a big change, there are interested parties at hand.
Amazon invested in Saks Global along with the Neiman’s deal and has a deep and abiding interest in really establishing itself in luxury fashion.
While there’s been a rumor floating around that the e-commerce giant moved up Saks’ cap table during the refinancing, sources close to the company threw cold water on that. One said the company did not move “one millimeter” up in the cap table.
A Saks Global spokesperson said: “Our equity structure has not changed since the completion of the Neiman Marcus Group acquisition in December 2024.”
Instead, they said Amazon has preferred stock, likely putting it first in line behind debt holders in the case of a bankruptcy. Amazon is also said to be owed something like a total $1 billion in minimum payments over five years, its cut for having Saks on its massive platform.
Also on the scene already is Jamie Salter’s Authentic Brands Group, which is always keen on buying well-known brands and already set up a joint venture with Saks Global, called Authentic Luxury Group. The 50-50 joint venture has a license agreement to use the Saks Fifth Avenue and Neiman Marcus trademarks.
Bondholders are said to largely be secured by real estate other than the Fifth Avenue flagship and could see their debt converted to equity in any potential filing.
A source close to the company said that the Fifth Avenue flagship has a mortgage, but beyond that the store is “unencumbered” and retains great value for the company and its investors no matter what happens.
Some bondholders have worried over a sellers note — money still due to be paid to the prior owners of Neiman’s — that is believed to be around $300 million and due early next year. But a source close to the company said that obligation does not link back to Saks Global and instead is owed by “a group of shareholders in the legacy Saks business.”
Trimmed-down Reinvention
But nothing is a given in retail and Saks Global has a lot of places it can turn even if it doesn’t ultimately bring in enough inventory to really drive sales to their full potential.
As one bond trader noted, “Going into the holiday season is not the right time to not have inventory or have your customer have a bad experience.”
A mediocre holiday could be buttressed by cash from some asset sales that would help the company keep up with its debts and continue to reinvent.
Bergdorf Goodman, which Saks Global picked up in the Neiman’s deal, is the crown jewel of the group, the tip of the luxury pyramid and in the market for new investors.
The company is looking to sell a minority stake in Bergdorf’s, with the price that’s been floated as $1 billion for just under half the business. Some see that price as pie in the sky and wonder if any buyers are interested in just a minority stake. But nobody doubts that selling a chunk of Bergdorf’s could raise Saks a ton of cash.
Bergdorf’s is also the kind of asset that attracts deep pocketed investors. To wit, sources said the company has been in active dialogue with Harrods-owner Qatar Investment Authority about a potential deal involving Bergdorf’s.
Saks Global has also been shopping around some of its real estate with department stores in Beverly Hills, Chicago and Washington, D.C., all said to be available, according to sources. The Beverly Hills store was vacated when Saks moved into the space formerly occupied by Barneys New York last year.
A person familiar with the company’s thinking described the potential sale of any stores as part of the ongoing work on the Saks Global Properties & Investments business.
Any sales could be sale-leaseback transactions where the store remains open, but the real estate is sold.
Saks has already been nibbling around the edges, recently “monetizing” the Neiman Marcus store in Plano, Texas, which is being sold to Centennial as the developer reenvisions The Shops at Willow Bend Center.
Backed up with money from asset sales, an OK Christmas could help Saks Global push through into next year, when it can continue to present its new vision of luxury shopping to the world.
Luxury Retail Remade
Saks Global might have started off 2025 in a hole, with many vendors smarting over money still owed for past orders and reluctant to ship fresh goods to the retailer, but the trends have been getting better.
Sales for the second quarter ended Aug. 2 fell 11.1 percent to $1.6 billion.
But Metrick, speaking at the WWD Apparel & Retail CEO Summit late last month, said the tide has been turning and that the flow of goods “began to normalize” in late September.
“You’re starting to see the business actually really come together,” Metrick said. “Think about our concession business [where inventory is not a problem]. That business was up double digits in the second quarter. So the luxury consumer is there. We know we haven’t lost our mojo. We can sell product. We can market product. We’ve got great stores. We’ve got traffic coming in.”
If consumers keep coming back and keep spending more it would start a virtuous circle as brands would continue to feel better about Saks as the future shone brighter.
That would amount to Saks Global’s own Christmas miracle — and one that would support what the company is doing online with its Saks shop on Amazon.
Metrick said Saks is successfully selling $4,500 dresses on Amazon and bringing new shoppers into the ecosystem.
“Nothing is sold on sale. It’s a full-price model,” he said of the Amazon shop. “Twenty percent of the customers that shop Saks on Amazon are back within 30 days. Just think about the new customers, the aperture that we’re opening up through Amazon. It’s unbelievable.”
Retail is a business where growth solves all and Saks has the pedigree, the name recognition and clearly a desire and willingness to make the changes that would take it into the future.
With a really good holiday bounceback, Saks Global would find itself on a much firmer financial footing as it continues to pay off its back bills, stay current on new shipments and make a roughly $127 million interest payment to bondholders late next month.
Christmas is a time to dream and Saks Global, with its acquisition of Neiman’s and its plans to rest luxury retail, is good at dreaming big.
