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NEW YORK — The parent company behind Saks Fifth Avenue and Neiman Marcus is set to close the majority of its Saks Off 5th outlets. This strategic move aims to shift focus back to its flagship department stores and generate funds to address debts during its Chapter 11 bankruptcy proceedings.
Saks Global, which currently operates 70 Saks Off 5th stores, announced plans on Thursday to retain only 12 of these locations. These remaining stores will primarily function as clearance outlets for excess inventory from Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman.
Additionally, the company has decided to shut down the last five Last Call stores, which provided discounted merchandise from Neiman Marcus.
In a further move, Saks Global will also close down Saksoff5th.com, a distinct legal entity. As a result, the company will cease direct purchasing for Saks Off 5th.
“As Saks Global undergoes a transformation, we are making bold decisions to realign our business, better serve our luxury clientele, and enhance full-price sales across our primary luxury brands,” stated Geoffroy van Raemdonck, CEO of Saks Global.
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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