Amazon’s $475 Million Luxury Bet Is Officially “Worthless” As Saks Global Hits Bankruptcy Court

Amazon isn’t taking its massive financial loss sitting down. The tech giant is currently locked in a heated legal battle with Saks Global, arguing in federal court that its $475 million investment in the luxury retailer has basically vanished into thin air.

The drama follows Saks Global’s recent Chapter 11 bankruptcy filing, which came less than a year after Amazon put up nearly half a billion dollars to help Saks acquire Neiman Marcus. In new court documents, Amazon’s lawyers didn’t hold back, stating that their “equity investment is now presumptively worthless.”

The partnership was supposed to be a game-changer. Amazon provided the logistics and tech support while Saks launched a “Saks at Amazon” storefront, bringing high-end fashion to the platform. Under that deal, Amazon was expecting to pull in at least $900 million in referral fees over the next eight years.

Instead, Amazon claims Saks “burned through hundreds of millions of dollars in less than a year” and left a trail of unpaid invoices to retail partners.

Now, Amazon is begging a judge to reject Saks’ bankruptcy financing plan. They argue the plan is rigged to load the company with even more debt while pushing Amazon to the bottom of the list for getting paid back. If things don’t change, Amazon warned it might seek “drastic remedies,” which could include asking the court to bring in a trustee to take over.

Despite the pushback, U.S. Bankruptcy Judge Alfredo Perez is allowing Saks to start tapping into $1.75 billion in new financing. Saks argued that without that cash injection, the company would face immediate liquidation.

As the luxury market continues to slow down, the fallout from the $2.7 billion Neiman Marcus merger is proving to be a nightmare for everyone involved. For Amazon, what was supposed to be a foot in the door of the luxury world has turned into a very expensive lesson in retail volatility.