Saks Global Inc., the embattled parent company of both Saks Fifth Avenue and Neiman Marcus, announced it will close 15 more department stores as part of its ongoing Chapter 11 bankruptcy restructuring. The closures include 12 Saks Fifth Avenue locations and three Neiman Marcus stores, according to ABC News. The affected Saks locations include stores in Chevy Chase, Maryland; Chicago; and San Antonio, Texas. All 15 stores are expected to remain open through the end of May before permanently closing their doors.
The latest round of closures comes on top of eight Saks Fifth Avenue stores and one Neiman Marcus store that the company announced it would shutter last month. With a total of 24 department stores now slated for closure by spring, Saks Global's remaining footprint will be dramatically reduced. Business of Fashion reported that the company will be left with just 13 Saks Fifth Avenue locations, including its iconic flagship store on Manhattan's Fifth Avenue, along with 32 Neiman Marcus stores and the Bergdorf Goodman location.
The restructuring has also taken a toll on the company's workforce. TheStreet reported that more than 1,200 jobs have been cut since the bankruptcy filing. Still, there are some signs of stabilization on the merchandise side. Nearly 500 brands have resumed shipping to Saks Global, releasing close to $1.3 billion in retail receipts. That figure accounts for more than 80 percent of the inventory the company expects to receive between February and April, a critical threshold for maintaining store operations during the wind-down period.
Saks Global filed for Chapter 11 protection in January after months of mounting speculation about its financial health. The filing came amid vendor disputes and growing concerns about the company's ability to service its debt following its high-profile acquisition of Neiman Marcus. Bisnow reported that the latest closures reflect management's effort to focus resources on its most profitable locations while trimming overhead during the restructuring process.
The unraveling of Saks Global underscores the continuing vulnerability of the luxury department store model. As Retail Dive noted, the company recently secured a final $300 million tranche of bankruptcy financing, suggesting it is nearing the home stretch of its restructuring plan. Whether that plan results in a leaner, viable luxury retailer or further liquidation remains one of the most closely watched storylines in retail heading into the second quarter.