Saks Global has received approval from U.S. Bankruptcy Court for its reorganization plan, which will allow the luxury retailer to go forward without as much debt and with what seem like stronger vendor relationships.

The plan was confirmed last Friday in U.S. Bankruptcy Court for the Southern District of Texas following a nearly five-hour, largely congenial hearing. The vast majority of Saks’ participating creditors had voted in favor of the plan.

“The brand community has demonstrated it is committed to the future of Saks Global,” Saks attorney Debra M. Sinclair of the law firm Willkie Farr & Gallagher told the court. “The company has utilized this process to focus on its core luxury business.” Saks has “revitalized relationships” while in Chapter 11, she said.

Several jewelry brands affected by the Saks bankruptcy, including LVMH, Shy, and David Yurman, were represented at the hearing, though their attorneys did not offer a statement on the plan during the proceeding. JCK reached out to some of these vendors but did not receive comments by press time.

Since it entered Chapter 11 bankruptcy in January, Saks Global has closed dozens of Saks Off 5th locations as well as 15 Saks Fifth Avenue and 33 Neiman Marcus stores.

In a press release issued Friday, Saks said it expects to exit Chapter 11 “in the coming weeks with a strengthened financial foundation.” The reorganization plan reduces the company’s debt by nearly 75% and “establishes the foundation…to accelerate sales growth, with a focus on strong full-price selling,” it said.

“Securing approval of our plan is an incredible achievement for Saks Global, and the broad-based support we have received from our capital partners, brand partners, and other key stakeholders reflects confidence in our future,” said Geoffroy van Raemdonck, CEO of Saks Global.

“With our capital partners’ commitment and the dedication of our talented team, we are on track to emerge as a stronger, more focused company, poised for profitable and sustainable growth,” he said. “I firmly believe in Saks Global’s enduring role as a leader in the luxury retail ecosystem, delivering exceptional experiences for customers and serving as the premiere gateway to the U.S. luxury consumer for our brand partners.”

Saks was so confident in its reorganization that it noted in the Friday statement that it expects to generate $9 billion in total gross merchandise value and double-digit adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) by fiscal 2030.

“With significantly reduced debt on the company’s balance sheet at emergence and having already achieved substantial cost savings through the optimization of our footprint, operations, and organization, our business is well positioned for future success,” Brandy Richardson, Saks’ chief financial officer, said.

In an interview with WWD, van Raemdonck said that 40% of Saks’ revenues come from customers who spend $36,000 annually with the company. “If you’re a brand, you want access to that customer because that’s the true luxury customer and the brands all aim to elevate themselves,” he told the magazine.

“We have 1,500 sales associates who sell more than $1 million, but on average sell $1.9 million each. That is the size of a small store or a small brand luxury store, and we retain more than 90% of those and they have 10 years of tenure with us,” van Raemdonck added. “That is really the stickiness we have and why the brands want to grow with us, especially today where the U.S. market is big.”

(Photo courtesy of Saks Global)

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