The Tamesis
The Council of Fashion Designers of America, the British Fashion Council, the Italian National Fashion Council and the Fédération de la Haute Couture et de la Mode called on Saks Global to repay the debts of independent designers.
On Monday, March 16, the leaders of the world’s four major fashion councils—the governing bodies that oversee fashion designers in their respective countries—sent a letter to Saks CEO Geoffroy van Raemdonck urging the company to consider the fate of smaller industry players in its restructuring plan. The letter came just hours after Saks Global announced that its five-year business plan had been approved by an ad hoc group of the company’s senior secured bondholders, along with an additional $300 million of a corresponding $1.75 billion in committed capital.
“We are writing this letter to address the impact of Saks Global’s current restructuring process on young independent fashion brands,” wrote Steven Kolb (CFDA), Laura Weir (BFC), Carlo Capasa (CNMI) and Pascal Morand (FHCM). “We understand that the restructuring process is complex and often involves difficult decisions. At the same time, we have learned that some emerging independent designers have been informed that they may not receive payment for merchandise that has been delivered.”
Saks is finalizing its reorganization plan, which will be filed in the U.S. Bankruptcy Court for the Southern District of Texas in the coming weeks, the company confirmed on Monday. Fashion Council leaders have urged Saks Global to ensure young independent brands are treated fairly and responsibly when settling outstanding payments under the scheme. Kolb said the purpose of the letter was to show solidarity among the four fashion capitals and support independent brands.
This comes after Saks Global confirmed earlier this month that it has been focusing on relationships with brand partners and has resumed shipments of nearly 600 brands, unlocking nearly $1.4 billion in retail revenue. Saks also said it has agreements or is close to agreements with more than 175 brands across categories, from large brands to smaller brands.
“We have great respect for the Council of Fashion Designers of America, the British Fashion Council, the Italian Chamber of Fashion and the Fédération Nationale de la Haute Couture and Fashion and the work they do on behalf of talented designers across the industry,” a Saks Global spokesperson said in a statement. “The company is reviewing the letter sent today. According to Article 11 The pre-application payments we are authorized to make are limited as required by the Chapter 11 cases. Our focus is on making steady progress in rebuilding trust with our established and emerging brand partners and strengthening these relationships to drive our collective business and look forward to building on our long-term industry relationships to set the stage for a bright future for Saks Global and our partners.”
Emerging and independent brands have been struggling since Saks declared bankruptcy in January, with thousands of dollars in pre-bankruptcy shipping bills yet to be paid. One designer told us: “We are in a different situation than Chanel, they can’t sink or swim because the payments from Saks Global need to be repaid.” fashion business January. “But if they don’t pay us, my business could be seriously damaged.”
“We plan to [Saks Global retailer orders]so it creates a really big cash flow problem — especially when you have fashion shows and you’re supposed to pay factories and that sort of thing,” another designer said last December as bankruptcy rumors swirled. “It’s really hard. “
