New York City, New York — Luxury retail giant Saks Global announced plans to close several additional department stores across the United States as the company continues restructuring under Chapter 11 bankruptcy protection.
The decision affects locations belonging to both Saks Fifth Avenue and Neiman Marcus as the company attempts to reduce debt and reshape its operations.
Company Announces More Store Closures
Saks Global confirmed that 12 Saks Fifth Avenue stores and three Neiman Marcus stores will be closing as part of the company’s restructuring efforts.
Among the Saks Fifth Avenue locations scheduled to shut down are stores in:
• Chevy Chase, Maryland
• Chicago, Illinois
• Las Vegas, Nevada
• San Antonio, Texas
Company officials said the affected Saks locations are expected to remain open until the end of May before closing permanently.
CEO Addresses Impact on Employees
Geoffroy van Raemdonck acknowledged the impact the closures will have on workers across the company.
“We recognize the impact these strategic decisions have on our colleagues and are deeply grateful for their contributions,” van Raemdonck said in a statement.
The company said it plans to support employees affected by the closures by offering transfer opportunities and assistance during the transition where possible.
Closures Add to Previous Store Shutdowns
The latest announcement comes shortly after Saks Global revealed another round of store closures earlier this year.
Last month, the company said it would close:
• Eight Saks Fifth Avenue stores
• One Neiman Marcus store
Those locations are expected to remain open until the end of April before closing.
Bankruptcy Filing Triggered Restructuring
The store closures follow the company’s decision to file for Chapter 11 bankruptcy protection in January.
The filing was made in the U.S. Bankruptcy Court for the Southern District of Texas after Saks Global missed a $100 million interest payment in December.
After entering bankruptcy proceedings, the company secured approximately $1.75 billion in financing to maintain operations while restructuring its business.
Debt Tied to Major Luxury Retail Acquisition
Saks Global’s financial challenges stem in part from its acquisition of other luxury retail brands.
The company gained ownership of Neiman Marcus and Bergdorf Goodman as part of a major retail consolidation.
However, the acquisition added approximately $2.2 billion in debt to the company’s balance sheet.
Additional Business Cuts Already Underway
As part of its broader restructuring strategy, Saks Global has already begun reducing other parts of its operations.
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• Closing 14 Fifth Avenue Club personal styling locations, with only three remaining
• Shutting down the home goods retailer Horchow
• Closing most Saks OFF 5th stores across the United States
• Ending operations at remaining Last Call outlet locations
Customers visiting Horchow.com have already been redirected to the home goods section of Neiman Marcus’ website.
Retail Industry Facing Continued Pressure
The restructuring highlights the challenges facing luxury department stores as consumer shopping habits continue to shift toward online retail and more specialized brands.
Industry analysts say large brick-and-mortar chains are increasingly reducing store footprints and focusing on fewer, more profitable locations.
The company has not yet released a full list of all the locations that will close during this restructuring phase.
What do you think about major department stores closing locations during bankruptcy restructurings? Share your thoughts respectfully in the comments below.
