On February 14, the newly formed Saks Global announced its plan to pay vendors past due balances in 12 monthly installments beginning in July.
These announcements come after Hudson’s Bay Company, the parent company of Saks Fifth Avenue, completed its $2.7 billion acquisition of Neiman Marcus Group, the parent company of Neiman Marcus and Bergdorf Goodman, creating Saks Global, as detailed in a previous alert.
Prior to the merger, Saks Fifth Avenue struggled to timely pay vendors. The merger sought to boost financial stability through a consolidated brand, which Saks Global appears to be implementing in recent actions. In addition to its vendor payment plan, Saks Global also proposed changes to its business structure and the multibrand luxury distribution model, generally, including a new payment schedule, to become effective on March 1, in which vendors will be paid within 90 days from receipt of inventory. Saks Global’s business plan also contemplates leveraging artificial intelligence to personalize and enhance customer experience and launching on Amazon in hopes of boosting revenue. Further, within days after releasing its plans, Saks Global announced two significant store closures: the Neiman Marcus flagship in Dallas, Texas, and the Saks Fifth Avenue flagship in Toronto, Canada.
We will continue to provide updates as Saks Global announces further details on its new business model.
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