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NEW YORK — The parent company of Saks Fifth Avenue and Neiman Marcus is closing most of its Saks Off 5th locations to focus on its iconic department stores and raise money to pay off its debts during its Chapter 11 bankruptcy reorganization.
Saks Global operates 70 Saks Off 5th locations and plans to shutter all but 12 stores, the company said Thursday. The remaining outlets will serve primarily as a selling channel for residual inventory from Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman, it said.
The company will close the remaining five Last Call stores, which are outlet locations that serve as a discount channel for Neiman Marcus.
Saks Global also said it will wind down Saksoff5th.com, a separate legal entity from Saks Global. Consequently, Saks Global said it will move away from purchasing merchandise directly for Saks Off 5th.
“As we advance on Saks Global’s transformation, we are taking decisive steps to realign our business to better serve our luxury customers and drive full-price selling across our core luxury businesses,” Geoffroy van Raemdonck, CEO of Saks Global, said in a statement.
Saks Global on Saturday will begin going-out-of-business sales at certain Saks Off 5th locations, subject to bankruptcy approval, and all Last Call locations. It’s already started going-out-of-business sales on Saksoff5th.com on Friday. The site showed up to 85% off on merchandise.
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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