Saks Global Enterprises is reportedly considering Chapter 11 bankruptcy as a last resort, facing a pressing deadline for a debt payment exceeding $100 million due at the end of the current month. The company is actively exploring other avenues to bolster its liquidity, including securing emergency financing or divesting assets. Simultaneously, some of Saks' lenders have engaged in private discussions to evaluate the company's cash requirements, specifically focusing on the potential for a debtor-in-possession loan, a common form of funding utilized during bankruptcy proceedings.

This financial predicament follows a significant strategic move made late last year, when Saks raised billions of dollars from bond investors to fund an ambitious turnaround strategy. Central to this plan was the acquisition of Neiman Marcus, a move intended to create a formidable multibrand luxury giant by leveraging scale and the technological expertise of new high-profile investors, including Amazon.com Inc. and Salesforce Inc. However, this acquisition did not yield the anticipated revival. Instead, it exacerbated Saks' debt burden and failed to alleviate long-standing issues with vendors, many of whom ceased shipments due to missed payments, thereby accelerating the company's losses.

In an effort to stabilize its financial position, Saks secured hundreds of millions of additional dollars from creditors in June through a debt deal. This agreement restructured repayment priorities, establishing multiple tiers of bondholders with varying claims on the company’s assets. Despite this restructuring, the value of these securities has since plummeted, underscoring growing investor concern that the turnaround initiative is rapidly running out of time. A representative for Saks stated via email, "Together with our key financial stakeholders, we are exploring all potential paths to secure a strong and stable future for Saks Global and advance our transformation while delivering exceptional products, elevated experiences and personalized service to our customers." PJT Partners, acting as the company's advisor, declined to comment.

By May, bondholders were already experiencing paper losses exceeding $1 billion as the ambitious plan faltered. Following the restructuring, Saks further cut its full-year guidance in October, citing declining sales attributed to inventory management challenges. The company continued to delay payments to some vendors in an attempt to conserve cash. Data compiled by Bloomberg indicates that Saks faces interest payments of over $100 million due on December 30. The $941 million portion of Saks’ second-out notes, restructured in August, were recently quoted at approximately 6 cents on the dollar, a significant drop from about 36 cents just two weeks prior. More senior debt, amounting to approximately $762 million, was quoted at around 46 cents.

Historically, Saks had been owned by Hudson’s Bay, the prominent Canadian retailer which liquidated several locations earlier this year after its own restructuring attempts. The Neiman Marcus transaction established Saks Global as a unified luxury retail offering, bringing together Saks Fifth Avenue, Saks Off 5th, Neiman Marcus, and Bergdorf Goodman under a single umbrella.