Saks Global, the parent company of Saks Fifth Avenue, Bergdorf Goodman and Neiman Marcus, filed for Chapter 11 bankruptcy late Tuesday, confirming weeks of speculation about the fate of the New York City institution and one of the last major luxury department stores in the United States.
But despite some social media posts and online comments, New Yorkers looking for steep liquidation-style deals may want to think twice before rushing out the door.
A visit to Saks’ flagship location across from Rockefeller Center on Tuesday showed a familiar post-holiday scene: seasonal discounts, with signs advertising “up to 75% off” across every floor. Sale racks were limited and clearly marked, and multiple sales associates said those were the standard January markdowns, unrelated to the corporate bankruptcy.
Tanya Perkins was speed-running her favorite sections on Tuesday afternoon to see if any deals stood out.
“I work nearby, so I come in all the time,” Perkins said. Asked if she was expecting any special discounts related to the bankruptcy, she said she’d forgotten it was even on the table.
The standard discounts make sense, given the nature of the filing: Chapter 11 bankruptcy is for companies or people who want to reorganize their debts while remaining in business. A different type of bankruptcy filing, Chapter 7, is for parties needing to liquidate all their assets to pay back debts, which often leads to the “closing sale” discounts some shoppers might be hoping for.
But the company’s financial strain is real. According to court filings, Saks owes collective billions of dollars to suppliers like Chanel ($136 million) and Estée Lauder ($16 million) and business vendors, like advertising giant Meta ($12 million) and tax-and-accounting services firm PricewaterhouseCoopers ($31 million).
The impending bankruptcy might explain why some shoppers have reported bare shelves in recent weeks — preparing to reorganize their debts often leads companies to stop ordering new inventory, and suppliers who haven’t been paid back in some time might be hesitant to ship new products. Chanel has recently pulled back from Saks locations across the country.
Going forward, the company is expected to use the bankruptcy process to close underperforming stores and renegotiate expensive leases. That could include Saks Off Fifth outlets and struggling Neiman Marcus locations, though iconic New York City locations, such as Bergdorf Goodman and the flagship Saks store, will likely remain.
Even if the business model is under serious pressure, it looks like business as usual at Saks' flagship for now.
