Evan Clark

Mon, May 19, 2025, 10:48 AM7 min read

Where does Saks Global go from here?

While fashion’s year started off with uncertainty around how Saks would integrate Neiman Marcus and pay off its past due bills, the attention shifted last month to U.S. President Donald Trump’s dramatic run up in tariffs.

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The trade war has at least cooled, but the uncertainty at Saks has started to heat back up.

The turmoil in February was sparked by Saks’ plans to pay vendors more slowly going forward and its yearlong schedule to cover back payments starting in July.

This time, concerns are coming from bondholders and driven by questions surrounding the company’s ability to make its $120 million interest payment due June 30 on debt accumulated in December to fund the Neiman’s deal.

Saks is more clearly than ever at a crossroads with the bonds trading for less than 48 cents on the dollar — although it is actively working to strengthen its balance sheet and is generally believed to be ready to cover the interest payment.

But the market is looking closely at the company’s finances and is not reassured.

“The company is a cash incinerator,” one debt analyst said. “It had a bad structure in December, it’s in a worse situation now. They weren’t getting shipments until they started accelerating their core vendors in February. They can make it through, but they don’t have much cushion. The synergies [cost cuts from combining Saks and Neiman’s] have not been realized, but the cost to achieve them has hit them.”

It’s a fast moving situation that could change on a dime as Saks works toward a more stable liquidity structure.

Last week, Standard & Poor’s said it could cut its “CCC-plus” rating on Saks “by up to two notches over the next few weeks to several months.”

The credit watchdog cited the “uncertainty of how the company will remedy its current liquidity position” and also said the retailer will likely face “additional challenges in building seasonal inventory.”

Bondholders, industry experts and analysts see as many as four different paths forward for Saks, which at last reckoning was said to have $350 million to $400 million of liquidity.

• Saks has been talking about carving a $300 million FILO facility out of its $1.8 billion asset-backed loan, but many market observers think the company also cuts a deal with bondholders, gaining enough wiggle room and more liquidity to get through Christmas. If the holiday turns out strong and the business is promising — fingers crossed — Saks could then find a way forward based on those results.

• The luxury retailer already has a relationship with Jamie Salter’s Authentic Brands Group, which could step in with more support for Saks, perhaps in return for a piece of the company’s intellectual property or greater access to its customer base across Saks, Neiman’s and Bergdorf Goodman.

• Amazon — which just set up a Saks storefront, tapping into some long-sought designer brands — could ride in to the rescue. One keen fashion observer called this the Hail Mary scenario.

• And then there’s the path that the entire industry is thinking about, but doesn’t want to talk about, even if the credit reports and talk of liquidity all suggest it’s a possibility — a missed interest payment on the bond next month and a free fall into bankruptcy.