Saks Global expects to exit bankruptcy this summer after receiving $500M in financing
The deal follows the $2.7B Neiman Marcus acquisition that left the company with $3.4B in debt
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The parent company of luxury retailer Saks announced Thursday that it entered into a restructuring agreement with its capital partners who committed to provide $500 million in financing when the company emerges from bankruptcy.
Saks Global Enterprises filed for Chapter 11 bankruptcy protection in January after it missed a $100 million interest payment in December because the company was burdened with $3.4 billion in debt after its $2.7 billion acquisition of Neiman Marcus.
The company now expects to exit bankruptcy this summer amid its ongoing restructuring effort.
"Achieving this important milestone underscores the progress we are making on our transformation and reflects our capital partners' confidence in our go-forward vision, guided by our relentless devotion to the luxury customer," said Geoffroy van Raemdonck, CEO of Saks Global.
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Saks Global, the parent company of Saks Fifth Avenue, signaled plans to exit bankruptcy this summer. (Victor J. Blue/Getty Images)
"As we advance the restructuring process and position Saks Global for the future, our focus remains on strengthening our brand partner relationships and delivering an expertly curated product assortment and personalized service for our luxury customers across Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman," van Raemdonck added.
Saks Global's announcement indicated that the company is continuing to work with its financial stakeholders on its reorganization plan and anticipates its filing in the coming weeks.
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Saks Global has offloaded some of its discount locations, including a dozen Saks Off 5th locations. (Jeff Greenberg/Education Images/Universal Images Group via Getty Images)
Additionally, the retailer's announcement on Thursday said its inventory has improved after more than 650 of its brand partners resumed shipping, which has helped lift customer engagement.
The company aims to unlock the potential of its three luxury banners and drive sustainable growth.
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Neiman Marcus is one of Saks Global's brands. (Getty Images)
Saks Global announced last month that it obtained access to an additional $300 million of its $1.75 billion bankruptcy funding package, which gave it sufficient liquidity to support operations. A group of its bondholders also approved its five-year business plan.
The retailer said in March it would close 12 Saks Fifth Avenue stores and three Neiman Marcus locations amid the restructuring.
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In January, the company announced it would close 62 of its off-price operations, including Saks Off 5th and the remaining Neiman Marcus Last Call stores.
Reuters contributed to this report.