Saks shuts down off-price operations with vendors still owed millions
Saks Global has given details of the winding down of the majority of its off-price operations, following its filing for Chapter 11 bankruptcy last month.
The company, which owns Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman, believes that the closing down of most of the Saks OFF 5th and Last Call stores will allow it to focus on its luxury, full-price business. Closing sales at these stores began at the end of last week.
Additionally (or consequently), saksoff5th.com, which is a separate legal entity, will also be closing down.
“As we advance on Saks Global’s transformation, we are taking decisive steps to realign our business to better serve our luxury customers and drive full-price selling across our core luxury businesses,” said Geoffroy van Raemdonck, CEO of Saks Global. “With these actions, we will be well positioned to seize the greatest opportunities for long-term growth and value creation. We sincerely thank our Saks OFF 5TH and Last Call colleagues for the important role they have played in serving our loyal customers.”
Of the $1.75 billion of committed capital that was negotiated during the Chapter 11 filing, Saks Global is still accessing the initial $500 million, mainly to reassure its suppliers and vendors, to ensure that inventory flow is stable.
Particular scrutiny will be placed on whether this support for vendors will materialize. More than one source has told Watch Insider that they are owed hundreds of thousands of dollars by Saks Global, which they’re not expecting to receive a dime of.
Particularly egregious are the accusations among the sources we spoke to of a pattern of false assurances and outright lies regarding debt payments, months and years ahead of the company finally filing for bankruptcy.
