Can Saks Win Back Brands?

Buyers at Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman will be out and about this fashion month. The company confirmed fashion business Saks Global will be represented at fashion shows and purchasing during fashion month. With the Saks retailer teetering on the brink of bankruptcy, this will be a season of regaining the trust lost last year. The company filed for Chapter 11 bankruptcy on January 14.

Saks Global’s restructuring is under new CEO Geoffroy van Raemdonck, who will work alongside newly appointed chief restructuring officer Mark Weinsten (Mark Weinsten worked with van Raemdonck during Neiman Marcus’ 2020 bankruptcy before the Saks merger). In addition to correcting Saks’ financial problems, van Riemdonk is also charged with repairing the retailer’s currently strained relationship with the brands it sells. Lana Todorovich, former chief marketing officer of Neiman Marcus, has been named global head of brand partnerships and will play a key role in repairing those relationships.

Experts note that much remains up in the air: Will Saks Worldwide be completely reorganized? Selling brands such as Bergdorf Goodman; closing a large number of stores; or liquidating assets. That will soon become clearer, said Sarah Foss, global head of legal at financial advisory firm Debtwire. The debtor must file a Chapter 11 reorganization plan within 75 days of filing for bankruptcy. If the plan is approved by the court and the milestones are not extended, Saks will exit bankruptcy protection within 160 days of filing, in early June.

On Jan. 16, Saks announced that the judge overseeing the bankruptcy had granted interim financing that would provide nearly $1.75 billion in new funding. Foss said this is a step to show suppliers that banks have the money to pay them. On January 29, part of the restructuring plan was exposed: Saks announced that it would close most of its low-price Saks Off 5th stores, and those stores that are still open will mainly serve as sales channels for the remaining inventory of Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman. Saksoff5th.com, a separate entity from Saks Global, will end its operations. The focus will be on full-price luxury sales and “sustainable profitable growth of luxury retail brands and partners,” the announcement said.

This means a vote of confidence in brands that have suffered losses during the bankruptcy process. Earlier this week, on January 26, Factor Hilldun Corporation CEO Gary Wassner began approving the order – which had been on hold since December – after agreeing on a process and terms with Saks. This is a net 30 agreement, which means Saks has 30 days from the date of receipt of the invoice to pay Hilldun (who owns the invoice) full payment.

Wasner said brands are “excited” to start shipping and don’t expect to hesitate to continue shipping. “If we approve it, they will ship it,” he said. “We are keeping our customers informed of Chapter 11 progress and status as much as possible. If we have concerns for any reason in the future, we will notify them immediately. Our most important requirement is that we receive payment for customer delivery in accordance with our agreement with Saks.”