The parent company of Saks Fifth Avenue and Neiman Marcus has announced a strategic shift to concentrate on its flagship department stores, leading to the closure of most Saks Off 5th outlets. This move comes as part of the company’s Chapter 11 bankruptcy reorganization plan aimed at addressing its financial liabilities.
Saks Global, which currently runs 70 Saks Off 5th locations, revealed on Thursday that it intends to close all but 12 of these stores. The remaining outlets will primarily serve as channels for selling surplus inventory from Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman.
Additionally, the company will shut down the five Last Call stores, which have served as discount outlets for Neiman Marcus merchandise.
In a further step, Saks Global announced that it will phase out Saksoff5th.com, a separate entity from the parent company. This decision means Saks Global will stop directly purchasing goods for Saks Off 5th.
“As we progress with Saks Global’s transformation, we are making strategic decisions to realign our operations to cater better to luxury consumers and enhance full-price sales within our core luxury segments,” stated Geoffroy van Raemdonck, CEO of Saks Global.
Starting Saturday, going-out-of-business sales will commence at selected Saks Off 5th locations, pending bankruptcy court approval, along with all Last Call stores. Online liquidation sales began on Saksoff5th.com on Friday, with discounts reaching up to 85% on various items.
Saks Global filed for Chapter 11 reorganization on Jan. 14, buffeted by rising competition and the massive debt it took on to buy its rival in the luxury sector, Neiman Marcus, just over a year ago.
Saks Global, which also operates Bergdorf Goodman, secured roughly $500 million of the broader $1.75 billion financial package. That money will help to pay its suppliers, who have faced a pile of unpaid bills from the retailer and who are critical for keeping the store stocked with merchandise.
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