Saks Owner Seeks $1B in Emergency Funding as CEO Steps Down
The company behind some of the most iconic names in luxury shopping is facing a defining moment, one that could shape its future for years to come.
The owner of Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman is scrambling to secure more than $1 billion in emergency financing, according to sources familiar with the situation. The urgent fundraising effort comes just as the company announced that its longtime chief executive is stepping down, fueling growing concerns that bankruptcy may be looming.
For a business long associated with glamour, exclusivity, and wealth, the current reality is far more sobering. Mounting debt, missed payments, and slowing luxury sales have created intense pressure behind the scenes that is now impossible to ignore.
A Cash Crunch That Can No Longer Be Hidden
At the center of the crisis is a serious shortage of cash. The company is struggling to meet its financial obligations, including a $100 million interest payment to bondholders that recently came due. On top of that, it owes millions of dollars to vendors, some of whom reportedly haven’t been paid in full for more than a year.
These unpaid bills have strained relationships with suppliers, many of whom depend on steady payments to keep their own businesses running. For a retailer built on premium brands and polished storefronts, the cracks are showing beneath the surface.
Sources say the company is now in intense talks with investors, hoping to raise a massive infusion of capital quickly. If those negotiations fail, the next step could be debtor-in-possession financing, a move often associated with Chapter 11 bankruptcy filings.
“It’s not over yet,” one source said. “But this is a critical window. What happens in the next couple of weeks could decide everything.”
Missed Payment Sparks Bankruptcy Fears
Concerns escalated sharply after the company missed an interest payment tied to $2.7 billion in debt it took on to acquire Neiman Marcus last year. While there appears to be a 30-day grace period to make good on the payment, missing it at all sends a clear signal to investors that the company is under real financial stress.
Missing an interest payment doesn’t automatically trigger bankruptcy, but in the retail world, it’s often a warning sign. Luxury retailers have been hit especially hard as consumers pull back on discretionary spending amid economic uncertainty.
What once seemed like a powerful merger now looks increasingly like a heavy burden, coming at a time when even wealthy shoppers are being more cautious.
Leadership Shake-Up Adds to Uncertainty
As the financial pressure mounts, the company also announced that CEO Marc Metrick is stepping down after nearly a decade leading Saks Fifth Avenue and close to 30 years with the organization.
In his farewell statement, Metrick reflected positively on his time with the company, pointing to the growth of Saks’ online business and its transformation into a major luxury e-commerce player. But his departure comes at a fragile moment, raising questions about stability and continuity.
Leadership changes during financial crises often unsettle employees and investors alike, and this one is no exception.
Metrick will be replaced by Richard Baker, the company’s executive chairman and a real estate magnate who previously served as CEO before the Neiman Marcus acquisition. Baker now steps back into the role at a moment when decisive leadership could make or break the company’s future.
Sales Slump and Cost-Cutting Take a Toll
The company’s recent financial performance has only added to the concern. In its latest quarter, revenue fell 13%, reflecting weaker demand across its portfolio, including Saks Fifth Avenue, Bergdorf Goodman, and Saks Off 5th.
To conserve cash, the company has already taken painful steps. Earlier this year, it closed its Saks Fifth Avenue store in San Francisco, a move that symbolized the broader struggles facing brick-and-mortar luxury retail.
More recently, the company sold the land beneath its Beverly Hills Neiman Marcus store, entering into a long-term lease to stay in the location. While the deal brought in much-needed cash, it also highlighted how aggressively the company is searching for liquidity.
Employees have also felt the impact. Several rounds of layoffs have taken place this year, creating uncertainty across corporate offices and store floors. For many workers, the fear is not just about job security, but about how much more change may still be coming.
Previous Funding Efforts Fall Short
This is not the first attempt to shore up finances. In June, the company raised $600 million from bondholders and explored selling a minority stake in Bergdorf Goodman to bring in additional capital.
Those moves provided temporary relief but failed to address the deeper challenges: high debt, rising costs, and a luxury market that has cooled significantly.
The Neiman Marcus acquisition, once seen as a bold consolidation play, now appears to have intensified the strain at exactly the wrong time.
A Pivotal Moment Ahead
The coming weeks will likely determine the company’s fate. If the $1 billion fundraising effort succeeds, it could buy time, allowing the company to pay overdue bills, reassure vendors, and stabilize operations.
If it fails, Chapter 11 bankruptcy may become unavoidable. While that wouldn’t necessarily mean stores closing overnight, it would almost certainly lead to restructuring, more cost-cutting, and difficult decisions about the company’s footprint and workforce.
For now, stores remain open, and customers may see little change. But behind the scenes, one of America’s most recognizable luxury retail groups is fighting to stay afloat.
As Richard Baker takes the helm once again, the question is whether fresh leadership and fresh capital can steer the company away from the edge, or whether this moment marks the beginning of a painful transformation.
