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The reasons were a multi-year crisis, billions of dollars in debt, deteriorating relationships with supplier brands and falling sales, the New York Times reported. The procedure jeopardizes the entire concept of classic luxury department stores in the United States.
Against this backdrop, Joffroy van Remdonk, former head of Neiman Marcus, will return as CEO of Saks Global. He will succeed Richard Baker, who initiated the merger of Saks and Neiman Marcus Group for $2.7 billion in 2024. The company said it has already secured $1.75 billion in financing to support operations during the restructuring period and intends to emerge from bankruptcy proceedings this year.
The 2024 merger deal could be seen as a last-ditch effort to keep key players in the premium segment in the US afloat. The organizer of the initiative, Richard Baker pursued the goal of creating the largest luxury group in the country, which would dictate conditions in the market and obtain exclusive rights from the leading fashion houses. To accomplish the takeover, the company took out a $2 billion loan, which it was unable to repay. Analysts have already dubbed the deal one of the most rapid and high-profile failures in the history of such mergers.
Attempts to cut costs and renegotiate terms with suppliers only worsened the situation. Revenue continued to fall, and due to delayed payments such key brands as Chanel, Oscar de la Renta and Altuzarra stopped working with the holding company. For the first time in 20 years, the company canceled its traditional Christmas light show on Fifth Avenue and sold off part of the Neiman Marcus property.
While the U.S. luxury market is transforming, European players are realigning their assets for greater sustainability. French chain Galeries Lafayette announced that it has entered negotiations to sell the building of its iconic Paris department store BHV Marais. The deal will allow Galeries Lafayette to focus on developing its flagship store on Boulevard Haussmann and its regional network, as well as strengthening its financial flows.
