It’s hard to imagine New York City without the glittering windows of Saks Fifth Avenue, but the unthinkable is now very much on the table.
After 158 years of representing luxury retail, the legendary department store chain is reportedly preparing to file for Chapter 11 bankruptcy protection in the coming weeks. One could call it a startling fall from grace for a brand that has dressed presidents, celebrities, and generations of well-heeled shoppers.
The missed payment that changed everything
Saks Global reportedly missed an interest payment exceeding $100 million that was due on Tuesday and is now in emergency talks with creditors to secure financing for what appears to be an inevitable bankruptcy filing.
Just two months ago, the retailer dismissed bankruptcy rumors as “inaccurate” when it closed its Saks Off 5th flagship in Midtown Manhattan alongside nine other stores nationwide. A company spokesperson even insisted that they were simply “working through vendor payments” as part of an extensive transformation plan. That denial now rings hollow.
It’s a cautionary tale about the dangers of taking on too much debt, for retailers and business owners watching this all unfold.
The merger that backfired spectacularly
Things for Saks Fifth Avenue started going downhill back in July 2024, when the retail giant’s parent firm, Hudson’s Bay Company, created a new entity called Saks Global after acquiring department store chain Neiman Marcus for a staggering $2.65 billion.
The deal, which ideally should have merged two of America’s most prestigious luxury retailers: Saks Fifth Avenue (including Bergdorf Goodman and Saks OFF 5TH), with Neiman Marcus, backed by heavyweight investors, including Amazon, Authentic Brands Group, and Salesforce, buried Saks Global under $4.7 billion in debt.
The financial weight of the merger was felt immediately, as sales plummeted 13% in the quarter through August 2, according to the New York Post.
Saks has also been chronically late paying vendors, as a consequence, leaving shelves that once showcased Gucci and Prada looking bare. When luxury shoppers can’t find the high-fashion brands they expect, they simply go elsewhere.
The desperate scramble for cash
The company was not idle while the walls were closing in. In August 2025, Saks completed a debt restructuring that included $600 million in new money. Efforts involved selling a minority stake in Bergdorf Goodman, the crown jewel of its luxury portfolio, and offloading real estate, including a high-value Beverly Hills property. The retailer also laid off roughly 5% of its corporate workforce and closed multiple Saks OFF 5TH locations.
But none of it seems to have made enough of a difference. The luxury goods market has seen quite a bit of slumping, what with inflation and economic uncertainty making even wealthy consumers pull back on discretionary spending. As such, the merger’s timing couldn’t have been worse.
What this means for an American icon
Saks Fifth Avenue was founded in 1867 in Washington, D.C., by Andrew Saks. The iconic flagship store opened on Fifth Avenue in New York City in 1924, and for nearly a century, that address has been synonymous with luxury and elegance. It was the place you went to for that memorable occasion dress or perfect suit.
A Chapter 11 bankruptcy filing would allow Saks Global to restructure its debts while continuing to operate. The stores won’t vanish overnight, but for shoppers who remember that a trip to Saks was an event, and the name alone meant something special, it’s more than just another business story. It’s a reminder that even 158 years of prestige can’t survive bad timing and crushing debt.
Sources: CNBC, New York Post, The Street