Saks Global faces financial challenges with upcoming payments, potential rescue from Amazon

From Yahoo Finance: 2025-05-19 13:48:00

Saks Global faces uncertainty with a $120 million interest payment due June 30, concerns from bondholders, and a CCC-plus rating from Standard & Poor’s. Paths forward include a FILO facility, support from Authentic Brands Group, or a potential rescue from Amazon. Bankruptcy is a looming possibility if liquidity isn’t improved.

Bondholders are actively working with financial advisers to navigate Saks’ liquidity challenges. The company has the $120 million for the interest payment due June 30 and intends to make it. Saks is also said to be working on a $300 million FILO facility and is still paying vendors weekly.

Investors holding 51% of Saks’ bonds are considering providing $200-250 million in new financing to improve the company’s standing in the capital structure. If the FILO facility materializes, Saks could have over $500 million to navigate its financial challenges. However, unanswered financial reports and ongoing uncertainty continue to make the situation tense. Saks Fifth Avenue is considering selling off real estate assets to raise funds, but bondholders are unsure of the true value. There are concerns about debts owed to Neiman Marcus’ former owners and promises to Amazon. The retailer is cutting down on vendors and focusing on controlled brands for better profitability.

Saks’ executive chairman, Richard Baker, confirmed plans to cut vendor base by 500-600 brands. The retailer aims to increase profitability by focusing on controlled brands and partnerships. Saks is navigating through a grand luxury reset plan, aiming to reduce costs and improve cash flow in a challenging retail environment.

Amid trade wars and competition from other luxury retailers, Saks must navigate internal and external challenges to remain relevant. The focus on financing and restructuring is essential, but Saks must also maintain its position as a leading luxury retailer in a competitive market.

Read more: Saks Global Walks a Narrow Path