Vendors Relieved and Cautiously Optimistic as Saks Global Restructures Under New Leadership

Vendors let out a sigh of relief Wednesday following the long-awaited bankruptcy of Saks Global, and were glad that there’s finally a sense of direction going forward. Of course, they’re very concerned about the money they’re owed, but they seemed pleased with the new management structure under new chief executive officer Geoffroy van Raemdonck and look forward to hearing what the go-forward plan is.

Gary Wassner, CEO of financing company Hilldun Corp., said, “I’m happy. It [the Saks-Neiman Marcus merger] was doomed from the start. They never had enough cash to execute on the plan. And so right after the acquisition they were behind the eight ball.”

Asked what he thinks of former Neiman Marcus Group CEO van Raemdonck, Wassner said, “I love Geoffroy. I love Darcy [Penick] and I love Lana [Todorovich]. For years, I worked with them through the Neiman’s bankruptcy. Geoffroy did a great job there at Neiman’s, and we have a very strong relationship. I’m confident in their ability to do what needs to be done to turn this company around.”

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Wassner said they have to wait for the courts before their brands can start shipping again. “The courts will understand the urgency in getting merchandise into the stores. So we just need to wait now for them to formalize the financing and let us know.”

Between 70 and 100 of Hilldun’s clients are impacted by the bankruptcy.

Wassner said he’s currently sitting with more than $130 million in orders for spring. He said his vendors lost $66 million in total.

When asked if the vendors will be paid what they’re owed, he said, “It will depend on how successful they [the stores] are. In Chapter 11, they come up with a plan to pay creditors what they can. If they can successfully turn this company around, there’ll be more money allocated to the pre-petition vendors,” he said.

Questioned if vendors will be gun-shy to ship Saks and Neiman’s again, he said, “Some will. Our clients are going to wait until we approve their orders before they ship. They have no reason to be concerned once we approve the orders,” he said.

Asked what van Raemdonck has that Marc Metrick, the former CEO, didn’t have, Wassner said, “Vision. And a real understanding of how important the vendor community is.”

He said Todorovich has great relationships with the vendor community. “She’s great, and they were well loved, all three of them,” he said. Penick is the former president of Bergdorf Goodman.

Andrew Rosen, the fashion entrepreneur and investor in several contemporary brands, said, “I think it’s really good that they were able to work this out this way. The team that they put in place has worked together before and was the team that’s taken part of this company out of bankruptcy. So I think that’s a positive.”

He said they’re an experienced team and, from what he understands, they’re already in motion. “They’ve had meetings and they’re putting together a plan and strategy and they’re being very proactive,” Rosen said. “Being able to reimagine themselves is key here. They can reimagine themselves in terms of the retail footprint that they have, they can restructure their debt. They won’t be under the same burden that Marc Metrick and Richard Baker were under,” he said.

“Richard Baker ended up getting themselves under an incredible financial burden that was greater than what they expected going in, number one, and number two, they couldn’t touch the store fleet because they didn’t have the protection of bankruptcy as a cost-effective way of reducing the number of stores,” Rosen said.

“Now they have a real cost-effective way of reimagining Saks and Neiman’s together,” he continued. He said that 20 years ago, it was a totally different situation. “You didn’t have the incredibly robust digital business, and you didn’t have all of the suppliers with such big direct-to-consumer footprint,” Rosen said, adding what’s happened in the past 10 years has been epic in terms of brands becoming their own retailers. “Saks and Neiman’s were originally constituted around a whole different business model,” he said.

Rosen likes the fact that Penick will have a bigger role at the company. He said she is strong digitally and one of the best digital merchants there.

Asked if his companies, which include Alice + Olivia, Veronica Beard and TWP, among others, are ready to start shipping again, he said, “I think the dust has to settle in, and the smoke has to clear and then, we’re all going to be able to ship.”

He said Saks Global has secured a significant amount of money in debtor-in-possession financing, “and they put quickly together a team and certainly reacted very quickly. I would say I’m very optimistic about what happened,” he said.

Rosen still believes that multibrand retailing is an important part of the retail landscape. “I really believe in the fact that consumers want to go to one place to be able to see everything and buy everything. I do believe very much that physical retail is critical to the ecosystem of fashion and that people want to see things three-dimensionally. They also want the experience of going shopping with their friends and making an activity out of it,” he said.

He predicts that Saks Global will get rid of a lot of stores. “Not all the stores in all of the locations are working. I wouldn’t be surprised if they closed a third of them.”

Deirdre Quinn, CEO of Lafayette 148, said about the Chapter 11 filing, “Seriously, I’m thrilled. I mean, it’s painful. It’s bittersweet, to be honest. We all got hit hard.” She said she’s not on the list of the 30 largest unsecured creditors.

She said her brand did business with Neiman Marcus, not Saks. Asked if she’s ready to start shipping Neiman’s again, Quinn said, “We have to wait for them. They have to work it out with our banks. I’m happy it’s over. We don’t have to think about it, we can just move forward. My team is excited. We know Geoffroy and we know Lana. It’s only the second week of January. Like, so much drama so early in the year. They’re a good team,” Quinn said.

Susan Sokol, cofounder of High Alchemy, a luxury multibrand showroom, said, “On one hand, I am relieved that the Band-Aid has been finally ripped off and they have put a great management team in place to oversee the restructuring and move forward plans. Our industry needs Saks Global as our one true luxury department store, and we certainly look forward to continue working with them. 

“That being said, I am very concerned about our brands that are owed money for past shipments and how this issue will be resolved. These are smaller designers like family to us and we don’t want to see them get hurt. This is top of mind right now.”

Jane Siskin, founder and CEO of Cinq a Sept, said, “We’re relieved this chapter is coming to a close. It is never easy to navigate prolonged uncertainty in business, for vendors, for employees and importantly for the customer. That said, we’re very much ready to put this behind us and start looking ahead. Saks Global has been an incredibly important partner to u over the past decade and a meaningful part of our growth story. We believe in luxury department stores, and we have a deep respect for what that platform represents.

“We’re excited to return our focus to product and to servicing the customer again. Yes, we’re looking forward to shipping and will monitor the next few weeks to determine the best next steps. We truly believe there is a pathway for Saks Global and feel optimistic about what’s to come. Our hearts go out to the teams at Saks Global who have been working through a very public and often speculative period and look forward to a smooth transition for the new management entering the picture as we know there is a lot of work to do,” said Siskin.

Jonny Saven, CEO of L’Agence, said, “After much anticipation, we are happy to hear the next chapter of Saks Global is in place. The customer is craving our product, and this allows us to serve our loyal and hungry-for-product woman with newness as we enter the spring window. Geoffroy has assembled a best-in-class team, who not only have the experience but have a rock-solid approach on what winning means, going forward. We look forward to getting shipping on track.”

Ramy Sharp, founder, CEO and creative director of Ramy Brook, said, “We remain committed partners to the Saks Global team. They’ve been supportive and instrumental to the growth of Ramy Brook and we’re optimistic they will successfully navigate this challenge. We’ve worked successfully with Geoffroy, Darcy and team for years and look forward to working with them through this time.”

Kerry O’Brien, founder, designer and CEO of Commando, said, “I look forward to putting this ill-fated chapter of Saks Global behind us. As both a vendor and a customer, it has been difficult to watch these iconic institutions suffer.”

“This relationship is deeply personal to me. Bergdorf Goodman was Commando’s very first customer 20 years ago, followed closely by Neiman Marcus and Saks. We have weathered good times and bad together, and we stand ready to embrace this new future.

“I am optimistic that this new management team brings the right vision to curate luxury goods and experiences that inspire and delight. If they can’t pull it off, no one can,” O’Brien said.

Vicken Arslanian, founder of Europerfumes, said, “Saks Global has been a great partner to us for so many years. No one should underestimate the importance of this retailer to the U.S. luxury market. We should all be rooting for them at this point and looking for the best possible outcome. The short-term pain is worth the long-term gain.”

— With contribution from Kathryn Hopkins