Saks Global is preparing shortly to file for bankruptcy after missing a debt payment related to its Neiman Marcus acquisition, according to the Wall Street Journal.
The Journal noted that the high-end department store Saks Fifth Avenue did not make an interest payment of over $100 million on its bonds and is talking to creditors to secure financing for the bankruptcy process.
Rising inflation and a weakening labor market have slowed discretionary spending for many consumers, including on luxury items. Saks Global has had many rounds of layoffs this year.
The company aims to sell a minority stake in luxury retailer Bergdorf Goodman to reduce its debt, a Saks Global spokesperson said in September to Reuters.
It also aimed to raise cash through the sale of a Beverly Hills property. In August, the company restructured debt, which included $600 million in new money, and exchanged $2.2 billion in senior secured notes.
The combination of Saks Fifth Avenue, Neiman Marcus, and other luxury retail and real estate companies aims to make it easier to compete with other department stores such as Nordstrom, Bloomingdale’s, and Macy’s.
The deal was funded by new investors, including Amazon, Authentic Brands Group, Salesforce, and others, with $2.2 billion in senior secured notes as well as an asset-based credit facility.
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