From Yahoo Finance: 2025-05-30 15:39:00

Saks Global’s CEO, Marc Metrick, is optimistic about the future of the luxury retail giant following the acquisition of Neiman Marcus. Despite financial challenges, the company secured $700 million in liquidity and plans to cut costs by $600 million over five years, aiming for a transformed luxury landscape.

With $4.3 billion in total borrowings and a $120 million bond interest payment due soon, Saks Global is focused on restructuring its business model to afford its debt. CEO Metrick and executive chairman Richard Baker are pushing forward with bold cost-cutting measures to achieve profitability and success.

Allies like Gary Wassner, CEO of Hilldun Corp., are showing support for Saks Global, citing confidence in the company’s cost-cutting efforts and the positive impact of merging with Neiman Marcus. Revenues for the year totaled $3.8 billion, including $432 million from Neiman Marcus, with plans to rebuild market confidence and profitability.

Saks Global’s “credit group” generated $3.5 billion in sales for the year, despite a 10 percent decline with Neiman Marcus’s incorporation. The company is focused on navigating financial challenges while aiming to dominate the U.S. luxury and designer market with strategic cost-cutting measures and synergies from the merger. Saks Fifth Avenue saw an improvement in gross profit margins to 41 percent in 2024, driven by lower markdowns and more concession sales. However, slow or non-existent payments led to a $650 million inventory shortfall last year. Saks plans to reinvent its model and extended payment terms to vendors to 90 days.

The longer payment terms caused an uproar but helped Saks catch up with suppliers, providing a $600 million boost to pay off past-due bills and increase working capital. The company owes $275 million to vendors from past shipments and plans to start paying that down over a year.

Saks reported that its inventory flow is steadily improving, leading to increased sales later in the first quarter. Selling, general, and administrative expenses increased to 42 percent of revenues last year, resulting in adjusted losses before interest, taxes, and depreciation of $102 million.

Adjusted EBITDA for the year totaled $161 million, with Neiman’s profits covering Saks’ business deficit. Saks acquired Neiman’s, and now CEO Metrick must make the integration successful.

Read more: Saks Global Hits ‘Turning Point,’ According to CEO Marc Metrick