Updated 5:11 p.m. ET Jan. 2
As Richard Baker takes full management control of Saks Global, the real estate investor is said to be exploring several avenues to alleviate the luxury retailer’s severe financial squeeze — and perhaps save the company.
Baker, currently executive chairman, took the reins as chief executive officer on Friday following the exit of Marc Metrick, who ended a 30-year run at the company and has, over the past year, faced immense backlash and criticism from vendors for Saks Global’s failure to pay its bills.
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Now it’s solely Baker’s problem to figure out a way to salvage Saks Global, the group he created last year by buying Neiman Marcus Group for $2.7 billion. Sources said he’s exploring several paths forward, including:
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- A bailout from Amazon, which has long been keen to really break into luxury retailing and invested in Saks Global’s deal to buy Neiman’s. Baker is said to have met recently in Paris with Jeff Bezos, who is still executive chairman of Amazon and has become steadily more interested in fashion following his engagement and marriage to Lauren Sanchez.
- Authentic Brands Group, which already owns Barneys New York, could also step in in some capacity. The brand management company is said by some to already control 51 percent of Saks Global’s intellectual property, which the sources claim is a stake that would grow to 77 percent if the retailer filed bankruptcy. (A person close to Saks Global disputed this and said the retailer owns its IP and that its joint venture with Authentic, dubbed Authentic Luxury Group, only has a licensing agreement to use the luxury retail brands within Saks Global.) Authentic would not be directly impacted by a bankruptcy as the retailer’s IP is said to sit in a “bankruptcy remote” vehicle.
- There is also said to be some other path forward that Baker is accessing that could not be learned at press time, but could be the long-rumored bankruptcy filing.
Saks Global declined to comment beyond the statement revealing Metrick’s departure while Authentic declined comment and an Amazon spokeswoman did not immediately respond to a query.
The specter of bankruptcy has hovered around the company since before it defied expectations and acquired the relatively healthy Neiman’s even as Saks failed to pay its own vendors.
Now the possibility of a bankruptcy filing has been brought to the fore in a new way. Saks Global is said to have missed a more than $100 million interest payment on Dec. 30, kicking off a 30-day grace period that it can use to work out some financial solution. Bondholders bought $2.2 billion in debt to fuel the Neiman’s acquisition in December 2024 and then put in another $600 million in August. But the group’s prospects have steadily dimmed.
The most protected of the retailer’s various bonds traded recently at 37 cents on the dollar as investors gauged the likelihood that they’d get the principal back when the debt matures in December 2029.
Saks Global is also said to once again not be paying vendors, owing them an estimated $500 million to $800 million.
Whatever comes next for Saks Global, sources expect it to happen within the next 30 days.
For Metrick, the change has already happened.
The company said the CEO transition “reflects Mr. Metrick’s desire to pursue new opportunities.”
It’s been a rough run for Metrick, who after a career of thinking big got the chance to remake luxury department store retailing by combining Saks Fifth Avenue and Neiman Marcus, while also setting up a Saks shop on Amazon.
On LinkedIn, Metrick said he joined the Saks Executive Training Program right out of college in 1995 and planned to stay just two years before going to business school and then investment banking.
What he found at the company and in luxury retailing was “a family, a large piece of my being.”
“I don’t know adulthood without Saks,” Metrick said. “I’ve lost parents, grandparents, I’ve gotten married, become a father, lost 120 pounds, gotten sober, and seen a ton of the world since I ‘met Saks.’”
Metrick said it would be the people he missed most at Saks Global and acknowledged the recent difficulties, which had him wrestling with vendors who were owed money and racing to reset the business for a new consumer landscape.
“The last few years have been challenging, but I will look back with pride on everything the team accomplished,” he said. “This is a hard business, even when times are good, but it is when times are tough that you really learn about your colleagues. We’ve worked through the tragedy of 9/11, the uncertainty of the 2008 financial crisis and of course the scary and devastating impact of the COVID[-19] pandemic. Through all of those moments, I know I’ve given the company my everything and I also know, it gave me everything back.”
While bringing Neiman’s and Saks together let the retailer cut hundreds of millions of dollars in costs, the combined company never found its footing financially, failing to make good immediately on its past-due bills to vendors and struggling to keep the sales floor stocked even during the key holiday season.
Saks Global has been working on options to bring more cash into the business, shopping around a 49 percent stake in Bergdorf Goodman and recently rushing through sale leasebacks of Neiman Marcus stores in Beverly Hills and San Francisco.
But the crossroads have been reached and Baker — both one of the industry’s most controversial and creative dealmakers who has made millions out of the deals he has put together — is at the helm of the company as it faces a key next step.
The company and its management presented the CEO switch as a much more straightforward change in leadership.
“Baker will work closely with the company’s management team to advance Saks Global’s transformation while delivering exceptional products, elevated experiences and highly personalized service to meet consumer demand for luxury retail,” the company said.
Baker added: “I look forward to continuing to work with our highly experienced management team, valued partners and other stakeholders to secure a strong and stable future for our company. Across Saks Global, with our deep industry expertise, well-established relationships within the luxury sector, and talented employees, we will strengthen our position so that we can capitalize on the many opportunities we see for our company in the luxury market.
“Marc has been a valued leader at Saks for many years, helping to drive significant transformation and growth while solidifying the company’s enduring position in luxury,” Baker said. “We thank Marc for his leadership and dedication and wish him continued success in his next chapter.”
What the statement did not address was Saks Global’s missed interest payment — or potential financing.
Saks Global certainly has well established relationships in fashion, but many of those relationships are in tatters now and would have to be rebuilt by the next iteration of the company, which still has 70 full-line luxury stores, off-price locations and five distinct e-commerce experiences.
— With contributions from Jean E. Palmieri