What the Saks bankruptcy means for Philly-area shoppers
Saks Global operates the Saks Fifth Avenue off City Avenue in Bala Cynwyd and Neiman Marcus at the King of Prussia Mall.
Saks Global, which operates Saks Fifth Avenue and Neiman Marcus, has filed for bankruptcy.
The high-end clothing retailer announced the move on Wednesday, saying in a statement that the Chapter 11 filing will “facilitate its ongoing transformation.”
In the Philadelphia region, Saks Global has long operated an expansive Saks Fifth Avenue store off City Avenue in Bala Cynwyd. The company also has a Neiman Marcus at the King of Prussia Mall, as well as Saks Off 5th discount outlets at the Franklin Mall in Northeast Philadelphia and at the Metroplex shopping center in Plymouth Meeting.
Both local Saks Off 5th locations are slated to close soon, as was reported this fall by several news outlets, including the Philadelphia Business Journal.
Here’s what the bankruptcy filing means for local Saks shopper.
Is Saks Fifth Avenue in Bala Cynwyd closing?
No. At least not in the immediate future.
Saks has filed for Chapter 11 bankruptcy, which means the company intends to reorganize financially and stay in business. That’s opposed to Chapter 7 bankruptcy — as is the Iron Hill Brewery case — through which businesses liquidate all their assets and close locations.
“To be clear, a Chapter 11 filing does not mean that Saks Global is going out of business,” Saks wrote in a bankruptcy FAQ on its website.
But when companies reorganize through bankruptcy, they sometimes do close stores, particularly underperforming ones.
Saks executives alluded to the possibility of this in its statement, which read in part: “As part of the Chapter 11 process, the company is evaluating its operational footprint to invest resources where it has the greatest long-term potential. This approach reflects an effort to focus the business in areas where the company’s luxury retail brands are best positioned for sustainable growth.”
The Saks Fifth Avenue opened in Bala Cynwyd decades ago. It is now the retailer’s only location in the Philadelphia region and is called “Saks Philadelphia” on the company’s website.
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The Inquirer reported in 2024 that business at the store was strong and that the chain had resisted offers to move to King of Prussia, according to the City Ave District.
In response to questions from The Inquirer about the future of Philadelphia-area stores, Saks Global said: “Our footprint evaluation is underway, and we have already begun to work collaboratively with our real estate partners to find future-facing solutions, where possible, to achieve a stable and sustainable business model and optimized portfolio on the other side of this process.”
Is Neiman Marcus in King of Prussia closing?
Also not in the immediate future.
King of Prussia Mall has long been a go-to spot for retailers. Even after the challenges of the pandemic, and amid competition from online retailers, the center remains among the region’s thriving shopping destinations.
In 2024, Saks Global bought Neiman Marcus in a $2.65 billion deal after Neiman Marcus filed for Chapter 11 bankruptcy during the pandemic.
Are Saks credit cards or gift cards impacted by the bankruptcy?
No, the company says.
“There are no changes to our credit card programs and rewards, with customers continuing to shop, earn and redeem benefits as usual,“ the company wrote in the FAQ. ”We continue to accept payments as usual, including credit cards and gift cards, with no changes to how customers transact with us."
Are Saks’ return policies impacted by the bankruptcy?
No, according to the company.
“Our refund and exchange policy is expected to remain unchanged, with refunds and exchanges being accepted and issued as usual,” the company wrote.
I am waiting on a package from Saks. Will my order still arrive?
Yes, all current and future orders will be delivered as usual, the company said.
What’s next for Saks?
The company says it is not going anywhere.
“Saks Global is firmly focused on the future, and we look forward to continuing to serve customers and deliver for our stakeholders,” the company wrote in the FAQ.
As of Wednesday, Saks was waiting for court approval of a $1.75 billion financing deal that would come with an immediate $1 billion debtor-in-possession loan from an investor group.
If approved, the deal “will provide ample liquidity to fund Saks Global’s operations and turnaround initiatives,” the company said in a statement.
Saks estimates its assets and liabilities at between $1 billion and $10 billion, according to court documents filed in U.S. Bankruptcy Court in Houston. Saks has between 10,001 and 25,000 creditors, including luxury brands like Chanel, to which Saks owes $136 million, according to the documents.
To lead the company during this transition, Saks also announced a new chief executive, with former Neiman Marcus CEO Geoffroy van Raemdonck replacing Richard Baker.
Saks said it hopes to emerge from bankruptcy later this year.
The company said in its FAQ: “With new capital and a stronger financial foundation on the other side of this process, we are confident that we can play a central role in shaping the future of the luxury retail industry while delivering the elevated shopping experience our customers expect from our dedicated team.”