Updated 8:43 p.m. ET Jan. 16
Saks Global has some dough again — and just in time.
The retailer, which filed for bankruptcy late Tuesday and was relying on the good graces of its asset-backed lender for cash, was due to run out of money entirely this week.
But a Houston judge granted the company’s $1.75 billion bankruptcy financing plan and Saks Global was able to access the first $500 million of its new funding just as the work week ended on Friday.
While the retailer’s stores — including Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman — have remained open, they’ve been held back by a lack of inventory.
Saks Global said the funding, “facilitates go-forward payments to brand partners and [will allow the] acceleration of inventory flow.”
Geoffroy van Raemdonck, the newly minted chief executive officer, said: “Access to this significant capital is instrumental as we work to strengthen our financial foundation and best position Saks Global for the future.”
The future of Saks Global is what’s been on fashion’s mind almost nonstop since the company loaded up on debt to buy Neiman Marcus Group for $2.7 billion and then slunk into insolvency.
But van Raemdonck, who is now leading operations, setting strategy and, maybe most importantly, serving as the retailer’s top cheerleader, is working to restore fashion’s faith in the department store group.
“Saks Global continues to play a distinct and enduring role in the luxury retail industry and, through this process, we will have the opportunity to build a more resilient company, primed for lasting financial and operational stability,” he said. “Our employees, brand partners, customers and vendors remain at the heart of everything we do, and we thank them for their ongoing support,” he said
Given the millions many are owed, brands have remained reluctant to ship spring merchandise to Saks and Neiman’s, even after the bankruptcy filing. Van Raemdonck and other Saks executives have been reaching out to brands, although sources said the payment terms are the same as Saks Global instituted before bankruptcy at 120 days. This has made brand cautious about shipping the retailer now that it is in Chapter 11.
A Saks spokesperson said: “All post-petition invoices for merchandise receipts will be paid in the ordinary course subject to their current terms. Our standard terms are net-90 days. No agreements include 120-day terms.”
