Saks Global is tightening its belt even further as it works through a massive Chapter 11 bankruptcy.
On Friday, the luxury giant announced it will pull the plug on 15 more department stores, 12 Saks Fifth Avenue locations and three Neiman Marcus spots. The move is part of a larger plan to dump underperforming real estate and double down on the high end markets that actually turn a profit.
The closures hit hard in major retail hubs, with stores in Chicago, Las Vegas, San Antonio, and Tysons, Virginia, all set to go dark. According to a company spokesperson, these locations will remain open until the end of May. Once the dust settles, the parent company will be down to just 13 Saks Fifth Avenue and 32 Neiman Marcus storefronts.
The iconic Bergdorf Goodman stores in Manhattan are safe for now, as are the personal styling suites at the flagship Fifth Avenue location.
This downsizing follows a rough year for the retailer. After merging Saks, Neiman Marcus, and Bergdorf Goodman into one “luxury powerhouse,” the company struggled under a $3.4 billion mountain of debt. Things got so bad that many brands stopped shipping products entirely last year because they weren’t getting paid.
The company has largely completed the process of shutting down underperforming stores with Friday’s announcement, but was still working with some landlords to finalize its store count after weak sales led to the company defaulting on vendor payments and losing out on inventory as brands stopped shipping products last year,” the company noted.
However, the tide might be turning. On Feb. 20, a federal judge signed off on a $1 billion bankruptcy loan, which has helped Saks clear the air with nervous vendors like Chanel, LVMH, and Dolce & Gabbana. Over 500 brands have started shipping again, and the company has already seen nearly $1.3 billion in new inventory.
Saks Global has already wiped out most of its Saks OFF Fifth and Neiman Marcus Last Call discount outlets.
Now, by focusing on a smaller number of elite locations, the company hopes to survive the “retail apocalypse” and stay afloat in the competitive world of high fashion.
