Bankruptcies pull back the curtain on a company all at once — laying bare the troubled descent into insolvency. 

And while the story of Saks Global’s fall has been obsessively covered in WWD, the paperwork puts a finer point on some things that were already known and also offers up some revelations. 

Here, five interesting takeaways from the declaration of Mark Weinsten, chief restructuring officer, as well as the initial filing, which detailed the retailer’s key unsecured creditors.

Saks Global linked up with Jamie Salter’s Authentic Brands Group in 2024, forming a 50-50 joint venture that “collects royalties from sales of products and services using the Saks Fifth Avenue, Saks Off 5th, Neiman Marcus and Bergdorf Goodman brands,” except for stores in the U.S. and Canada and the e-commerce businesses globally. 

But in the case of a bankruptcy, Authentic’s preferred equity in a division of Saks will be “exchangeable for newly-issued equity” in Authentic Luxury Group. According to sources, that will give the brand management a 77 percent stake in the joint venture. 

When the joint venture was set up, the retailer “transferred intellectual property related to Saks, Saks Fifth Avenue, Saks Off 5th, Neiman Marcus and Bergdorf Goodman brands to certain subsidiaries that are not guarantors on the debtors’ funded debt,” Weinsten said.

The company’s deal to set up a Saks shop on Amazon came with a big promise. 

“As part of this arrangement, [Saks] is required to pay referral fees to Amazon, and, in certain circumstances, [Saks] must make true-up payments to Amazon for any shortfalls in such referral fees based on certain annual minimum amounts up to an aggregate of $900 million over eight years,” Weinsten said. 

That arrangement will likely have to be reset now as Saks Global didn’t make it through Year One.

Saks Global’s management long maintained that it planned to combine and rejuvenate Saks and Neiman Marcus, while paying vendors their unpaid invoices, cutting costs and rebuilding the business. 

The court filings bear that out, but make clear how much of an uphill climb it was given how burnt suppliers felt. 

Saks Global brought in $600 million in new money over the summer, but was able to devote only $244 million of that “for catch-up payments to vendors as the remaining proceeds were needed for working capital purposes as the debtors [Saks Global] continued to expend funds to integrate Neiman Marcus, while they faced a significant second quarter EBITDA [earnings before interest, taxes, depreciation and amortization] loss driven by lower receipts,” Weinsten said.

Accordingly, Saks Global struggled through the second half with $550 million less in inventory than it forecast in July.

Saks Global started negotiating with an ad hoc group of bondholders who “collectively own approximately 72 percent of the existing SPV Notes and approximately 50 percent of the existing 2O Notes,” Weinsten said. 

Those talks finally came together, resulting in three debtor-in-possession financing facilities that will give the company $1.75 billion to navigate the bankruptcy process to an exit.

The largest unsecured creditor in the Saks Global bankruptcy is Chanel, which is owed $136 million — more than twice what the retailer owes its next biggest creditor. 

A Chanel spokesperson was not immediately available to comment. 

The amount caught many by surprise, though, given that the brand’s business with Saks Global was believed to be on a largely concession basis. One source pointed out that, unlike some other luxe brands, Chanel continued to use Saks Global’s point of sale technology, which might have left a good chunk of the company’s payables left in the retailer’s system. The concessions also were focused mainly on Chanel’s fashion category, while it also most likely shipped a significant amount of inventory to Saks and Neiman’s for its fragrance, makeup and skin care, which would not have been concession.

Regardless, the claim along with the millions owed to other top brands shows just how important department stores remain to the world of luxe.

Can Saks Be Fixed? 
A Look at Saks’ Filing for Bankruptcy
Saks’ Top Unsecured Creditors
Vendors Respond to Saks Filing