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The owner of Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman is in a race to land more than $1 billion in rescue financing from new and existing investors – even as the company announced its CEO is stepping down, The Post has learned.
The luxury giant needs a cash infusion to pay off a slew of debts that include a $100 million interest payment to bondholders that came due earlier this week. The company also owes millions to vendors, many of whom have not been paid in full for more than a year.
Saks is now in discussions with investors for a massive cash injection to stave off a possible bankruptcy filing, a source with knowledge of the situation told The Post. If those talks fail, the capital could take the form of debtor-in-possession financing in a Chapter 11 reorganization, the source said.
“The discussions will likely wrap up within a couple of weeks,” this source said. “It’s not resolved yet.”
Reports of a possible bankruptcy ramped up this week after the luxury retailer missed an interest payment to bondholders on Tuesday for the $2.7 billion it borrowed to acquire Neiman Marcus a year ago.
Saks Global appears to have bought itself a 30-day grace period for the interest payment, according to RetailStat, which provides credit data and analysis on retailers.
Meanwhile, Saks Global announced on Friday that CEO Marc Metrick is stepping down after a decade at the helm.
“After nearly three decades with Saks, I will be stepping down as chief executive officer,” Metrick said in a statement. “From building a world-class team to establishing Saks.com as a leading luxury e-commerce platform, I am proud of what we accomplished.”
He is succeeded by the company’s executive chairman, Richard Baker, a real estate mogul who was previously CEO before the Neiman Marcus acquisition.
The company said Metrick, who led Saks Fifth Avenue since 2015, is leaving to “pursue new opportunities.”
Saks Global’s revenues, which include Bergdorf Goodman and Saks Off 5th, dropped 13% in the company’s most recent quarter, which ended Aug. 2.
In May, the company closed a Saks Fifth Avenue store in San Francisco. This week, it sold the land beneath its Beverly Hills Neiman Marcus shop to Ashkenazy Acquisition Corp. for an undisclosed amount. The store now has a long-term lease with the New York-based Ashkenazy.
In June, Saks Global said it raised $600 million in fresh capital from bondholders. It has also sought to sell a minority stake in Bergdorf to raise more funds.
The merger with Nieman Marcus coincided with a slump in demand for luxury goods.
There have been several rounds of layoffs this year at the company, which operates more than 70 department stores and is the largest luxury retailer in the world.
“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 in statement. “We thank Marc for his leadership and dedication and wish him continued success in his next chapter.”
