Saks, one of the most famous retailers in the world, has sought Chapter 11 bankruptcy protection as it seeks to establish “a strong and stable future”.
Saks Global, which also owns the Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman businesses among others, revealed its bankruptcy filing alongside what it described as a “transformative financial transaction” and the appointment of a new chief executive.
Saks said: “As part of the chapter 11 process, the company is evaluating its operational footprint to invest resources where it has the greatest long-term potential. This approach reflects an effort to focus the business in areas where the company’s luxury retail brands are best positioned for sustainable growth.”
The retailer also revealed a “financing commitment of approximately $1.75bn [£1.3bn]” – $1.5bn [£1.1bn] from an “ad hoc group” of senior secured bondholders and $240m [£178.3m] of “incremental liquidity” from asset-based lenders and said: “This financing package will strengthen the company’s balance sheet and position it for a strong and stable future while it continues to provide customers with unparalleled multi-brand luxury shopping experiences.”
Geoffroy van Raemdonck has been appointed chief executive with immediate effect. He is a former chief executive of Neiman Marcus and succeeds Richard Baker and poversees a raft of new directors.
Van Raemdonck said: “This is a defining moment for Saks Global, and the path ahead presents a meaningful opportunity to strengthen the foundation of our business and position it for the future…
“In close partnership with these newly appointed leaders and our colleagues across the organisation, we will navigate this process together with a continued focus on serving our customers and luxury brands. I look forward to serving as chief executive and continuing to transform the company so that Saks Global continues to play a central role in shaping the future of luxury retail.”
Saks decision to seek Chapter 11 protection is expected to destroy the value of investors including Amazon and Salesforce.
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