Saks Global receives court approval for reorganization plan

The US bankruptcy court for the southern district of Texas has approved the reorganization plan of Saks Global Enterprises LLC (Saks Global), a US multi-brand luxury retail company. The plan gained support across the capital structure from participating creditors, with an overwhelming majority voting in favour. Confirmation of the plan allows the company to exit chapter 11 in the coming weeks with a strengthened financial foundation.

“Securing approval of our Plan is an incredible achievement for Saks Global, and the broad-based support we have received from our capital partners, brand partners and other key stakeholders reflects confidence in our future,” said Geoffroy van Raemdonck, chief executive officer of Saks Global. Van Raemdonck added that with the commitment of capital partners and the dedication of the team, the company is on track to emerge stronger and more focused, poised for profitable and sustainable growth.

Upon emergence, the debt of Saks Global will be reduced significantly, by nearly 75 percent, and the company will have the liquidity necessary to support operations and invest in its future. The plan establishes the foundation for the retailer to accelerate sales growth, with a focus on strong full-price selling. The company aims to generate 9 billion dollars in total gross merchandise value and double-digit adjusted EBITDA by fiscal year 2030.

Progress toward sustainable growth

Brandy Richardson, chief financial officer of Saks Global, noted that with significantly reduced debt on the balance sheet at emergence and having already achieved substantial cost savings through the optimization of its footprint, operations, and organization, the business is well positioned for future success.

In less than five months, Saks Global has progressed in evolving its business to support a more sustainable future. This includes establishing an improved capital structure and strengthening relationships with brand partners to facilitate the delivery of a curated product assortment.

The company has also optimized its store footprint and supply chain network to support its integrated retail model. This model is anchored by the best-performing stores in markets with a high concentration of luxury customers, alongside distinct e-commerce platforms and remote selling services. Saks Global has also focused on its core luxury business by streamlining the majority of its off-price business to prioritize luxury and full-price selling, while right-sizing the corporate team to align with this strategy.

The actions of the company are translating into sustained momentum. Store sales for the go-forward operations continue to show steady improvement, reflecting stronger customer engagement as a result of increased inventory.