Saks Global is reportedly nearing a Chapter 11 bankruptcy filing, just a year after attempting to build a luxury retail powerhouse through a massive merger that instead left it weighed down by debt.
Multiple reports Friday said the retailer is on the brink of restructuring, highlighting how even “premium” department store brands are not immune to the harsh math of modern retail.
A Luxury Mega-Merger That Left No Room for Error
Saks Global was formed in 2024 through a $2.7 billion merger that combined Saks Fifth Avenue with Neiman Marcus. The deal was financed with roughly $2.2 billion in debt, with management betting that size and scale could protect the business as luxury spending slowed.
Instead, the company got hit from both ends: weaker demand and higher financial obligations.
By October, Saks posted a 13% year over year revenue decline, and the strain reportedly spilled into operations, with some vendors going unpaid for months and many halting shipments.
The Interest Payment That Made It Real
The situation escalated in late December when Saks missed a $100 million interest payment, pushing bankruptcy expectations into overdrive.
According to Bloomberg, Saks is now seeking a $1.25 billion lifeline loan to keep stores operating through a potential Chapter 11 process, essentially a financial bridge to survive the restructuring.
It’s Not Just Saks, It’s the Whole Category
Saks’ crisis might be debt-driven, but the broader backdrop is even uglier: department stores have been in decline for more than two decades.
U.S. Census Bureau data shows department store sales peaked around the early 2000s and have trended lower ever since as e-commerce and big-box retail steadily absorbed market share.
And the casualties keep piling up:
Macy’s plans to close 14 more stores this year as part of a plan to shut around 150 locations by the end of 2026
Kohl’s said in November it expects net sales to fall 3.5% to 4.0% in 2025 as consumer behavior shifts
Placer.ai data shows off-price and warehouse retailers again pulled more holiday foot traffic than traditional department stores
Bottom line: Saks may be the most dramatic example right now, but it’s also a symbol of something bigger. The old department store model is collapsing, and even luxury branding cannot out-run debt, declining foot traffic, and a retail world that has moved online.