Beleaguered Saks fights legal battle to keep two stores open

Battered, bruised, and bankrupt, luxury department store Saks is hoping to block a move to close down two of its prime locations.

The two stores—in the Stanford Shopping Center, California, and in an outlet mall in Woodbury, New York, respectively—are part of shopping malls owned by Simon Property Group.

They claim that Saks Global reneged on rent payments, as well as other costs, shortly before it filed for Chapter 11 bankruptcy protection in January.

Saks’ defence, as filed in a court on Monday, is that the Chapter 11 agreement gives it time to pay back any outstanding rent or other costs that it allegedly owes, without Simon Property Group disrupting its normal business practices.

It is the latest relationship involving Saks that’s under strain, with the retailer and property group previously enjoying a lucrative partnership. According to a Bloomberg Intelligence report, Saks is the company’s sixth largest tenant by leased square-footage. Plus, Simon Property Group had previously invested $100 million to assist Saks’ acquisition of Neiman Marcus in 2024.

In its court filing, Saks said: “Simon has decided that it can make more money on certain of the leases by re-letting them at higher rates.”

The crux of the disagreement revolves around whether Simon Property Group’s eviction notice to Saks should take into account the Chapter 11 filing or not, with Saks having been told to leave the properties by January 18, less than a week after the filing on January 13. It claims that Saks Global owes at least $5.7 million.

The committee representing Saks Global’s unsecured creditors are supporting the retailer in the court filing, saying that the leases were not properly terminated ahead of the Chapter 11 agreement coming into force.

The request by Simon Property Group is due to be reviewed by a Texas bankruptcy judge who is overseeing Saks’ Chapter 11 case.