Saks Global, the parent company of Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman, is leaning on its real estate portfolio as a lifeline after filing for Chapter 11 bankruptcy this week.
The retailer operates roughly 125 stores totaling 13 million square feet across the United States, including high-profile locations on Manhattan’s Fifth Avenue, Beverly Hills’ luxury corridors, and top-tier malls such as Bal Harbour Shops in Florida. The company owns or controls ground leases at 39 of its sites, giving it multiple potential avenues to raise liquidity through property sales, leasebacks or selective closures, according to a Reuters’ analysis of its portfolio.
Notably, the flagship Fifth Avenue store is excluded from the bankruptcy, as it is separately owned and mortgaged for $1.25 billion.
The bankruptcy follows financial pressures tied to Saks Global’s acquisitions of Neiman Marcus and Bergdorf Goodman last year, which added $2.7 billion in debt, combined with operational challenges including difficulty paying vendors and managing inventory, even as luxury consumer demand remains uneven. Saks Global secured $1.75 billion in debtor-in-possession financing to maintain operations while it works with creditors on a reorganization plan. Former Neiman Marcus CEO Geoffroy van Raemdonck has been appointed CEO to guide the company through restructuring.
Court filings show Saks has requested approval to shutter four nonoperating “dark stores,” which are unlikely to reopen, and may monetize additional underperforming locations. Analysts estimate such sales could command 40% to 50% discounts compared with fully operating stores, though sale-leaseback arrangements could provide liquidity while keeping stores running, according to Matt Weko, division president at JLL Capital Markets. These strategies could allow Saks to preserve the value of its higher-performing real estate while avoiding a fire-sale liquidation.
Portfolio reviews are expected to focus on locations where Saks and Neiman Marcus co-anchor malls, which can create internal competition, according to a Reuters report. At Houston’s Galleria Mall, for example, both brands sit alongside more than 400 stores, including luxury names such as Balenciaga, Louis Vuitton, Gucci and Bottega Veneta. Some of these co-located sites may be among the first to be sold or monetized.
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