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Every year, the stores down Manhattan’s Fifth Avenue dress up their windows at Christmastime. Tourists from all over the world come to gawk at all the glitter, lace, ruffles and bows.
Saks’s Fifth Avenue location, so iconic that it’s embedded in the brand’s name, is usually dressed top to bottom during the holidays. In 2023, the store partnered with Christian Dior to display a giant zodiac calendar. As part of the light show, fireworks were released from the top of the store to the oohs and aahs of spectators.
But in 2024, the show went dark. Saks Fifth Avenue was without its extravagant lights throughout the holiday season, for the first time since the show debuted in 2004.
Money was tight that year. The company had just announced a $2.7bn deal to acquire competitor Neiman Marcus. To fund the deal, Saks borrowed $2.2bn.
It was a “challenging year for luxury”, Saks told the New York Post at the time, but the company voiced optimism for the new year. After the acquisition, the newly created Saks Global company would oversee three luxury department store brands: Neiman Marcus, Bergdorf Goodman and Saks Fifth Avenue.
But just more than a year after this new luxury behemoth was formed, Saks Global on Wednesday announced that it had filed for chapter 11 bankruptcy, amid problems paying off its debts. While filing for chapter 11 bankruptcy doesn’t force a company into liquidation, it’s a major hit to a brand that was once among the most prestigious in retail.
The bankruptcy appears to mark the latest in a string of once-quintessential American retail giants now struggling to pay their bills. Many companies that rely on bricks-and-mortar stores have struggled to compete with online retailers. Saks is no exception.
But that’s just part of the story. The changing retail environment has shaken many companies, but some – even department stores – are learning to survive. Saks competitors Bloomingdale’s and Nordstrom both reported revenue growth last year.
So what happened to Saks? To those who have been following the company over the last year, bankruptcy almost seemed inevitable. Not because of retail’s shifting reality – though that hasn’t helped the company – but because of a string of decisions made by company executives over the last few years.
Saks is the third department store firm owned by former parent company Hudson’s Bay that has filed for bankruptcy. Hudson’s Bay spun off Saks Fifth Avenue, Saks Off 5th, Bergdorf Goodman and Neiman Marcus into a separate company, Saks Global, in 2024.
Hudson’s Bay acquired Lord & Taylor in 2006, and while the company held strong for years, it eventually sold the chain’s flagship Fifth Avenue store to WeWork, and the entire brand in 2019. The company closed its remaining stores in 2020.
Last year, Hudson’s Bay – the Canadian department store that gave its namesake to its parent company – liquidated all of its stores after filing for chapter 11 bankruptcy, citing struggles to pay back its lenders and suppliers.
Analysts agree that Saks made a huge bet buying Neiman Marcus, especially with $2.2bn of borrowed funds. “As soon as you put debt into the equation in this kind of environment, it just crunches your ability to operate,” said Neil Saunders, managing director and retail analyst at GlobalData Retail.
This is especially true for department stores that rely on relationships with vendors to stock their stores. With everything imaginable available online, the draw of a bricks-and-mortar store is the curated selection they can offer consumers.
But after the Neiman Marcus deal, Saks Global struggled to pay back its vendors. In its bankruptcy petition, the company listed luxury firms including Chanel and Kering, owner of Gucci, as some of their creditors, with the company owing them tens of millions of dollars in unpaid invoices. In a recent note to investors, analysts at S&P Global said Saks had experienced “significant inventory challenges” over the last three years.
Dwindling stock in stores hit on Saks’s bottom line last year. In the second quarter, the company’s revenue dropped 13%.
Come the turn of the year, things started to look dire. Saks Global CEO Marc Metrick, a longtime executive with nearly 30 years at the company, abruptly announced his departure. It emerged soon after that the company had missed a multimillion-dollar interest payment on its loans at the end of 2025.
To some industry observers, that’s the catch. What may seem like a retail company on the surface is likely serving another purpose for company executives.
“They certainly will talk about the intention to be a global retailer, but they also see a group that has very large real estate assets. It owns some of the properties that it trades from in very prime locations,” Saunders said. “And they will say, look, if we can’t make the retail bit work, does it really matter?”
Saunders pointed to longtime Sears CEO Eddie Lampert, who oversaw the liquidation of the company’s store while still maintaining control of its real estate holdings through a separate company, which he owned.
“Their mindset is deal-making, it’s asset monetization,” said Saunders. “It’s not, hey, here are a couple of retail brands that we need to protect, cherish and grow.”
When announcing its chapter 11 filing, Saks Global also said that executive chair Richard Baker would step away from the company. Baker is also the longtime CEO of Hudson’s Bay, and of leading real estate and investment company NRDC Equity Partners.
It’s a sign Saks Global is planning to pivot back into its retail origins. Geoffroy van Raemdonck, Neiman Marcus CEO from 2018 to 2024, has taken Baker’s place.
“Richard Baker is all about real estate,” said Shelley Kohan, a former Saks executive. “He’s not about retail. He’s never been a retailer.”
“For a high-end luxury company, you need a merchant running [the business] and a merchant that has a deep connection with a vendor community, that understands at the end of the day [that] a department store like Saks is all about product,” added Kohan, a professor of fashion business management at the Fashion Institute of Technology. “The merchandising and vendor relations makes it what it is for the consumer.”
Baker, through Saks Global, did not respond to a request for comment.
Experts point to Macy’s CEO Tony Spring as a retail leader who is considered a “merchant”. Under him, Bloomingdale’s – which is owned by Macy’s – has been expanding through stores with a smaller physical footprint than the typical multifloor department store, a strategy also taken on by competitor Nordstrom.
“His view is, I want to grow it over time, and protect it,” Saunders said. “It’s a very, very different mindset [from Baker]. Neither of them are completely wrong, but they come from very different positions.”
In its announcement Wednesday, Saks Global said incoming CEO van Raemdonck will be “appointing industry veterans and former Neiman Marcus Group leaders” to join him as Saks executives.
Saks’s bankruptcy is not the end of the company, but a fork in the road for the luxury department store brand.
“I think there’s a lot of opportunity for Saks to more consistently put their business decisions in the eyes of the customer,” Kohan said, adding that she’s a “firm believer” in physical retail: “The consumers are still out there.”
