Saks files for bankruptcy protection, Geoffroy van Raemdonck appointed CEO

Saks Global has officially succumbed to bankruptcy. The US luxury retail group has commenced voluntary chapter 11 proceedings in the US Bankruptcy Court for the Southern District of Texas.

The company, which owns Saks Fifth Avenue, Saks Off 5th, Bergdorf Goodman and Neiman Marcus, has said its stores will remain open for now. The filing intends to facilitate an ongoing transformation programme, through which Saks Global will evaluate its operational footprint.

A 1.75 billion dollar financing package has also been finalised, including a 1.5 billion dollars of debtor-in-possession funding to aid group operations and turnaround initiatives. Part of this will be made available once the company emerges from bankruptcy, which is expected later this year.

According to court documents, the group’s retail subsidiary Saks Fifth Avenue listed one billion to 10 billion dollars in assets and liabilities. The filing will allow the luxury retailer time to formulate a debt restructuring plan with creditors or seek a new owner to avoid liquidation.

Former Neiman Marcus Group CEO takes helm

To oversee the process, Saks Global has enacted a major overhaul of its leadership team. Former Neiman Marcus Group head Geoffroy van Raemdonck has taken over from Richard Baker as chief executive officer, just days after Baker’s appointment to the helm. Baker has also subsequently stepped down as executive chairman.

Upon his appointment, van Raemdonck named Darcy Penick as president, chief commercial officer, and Lana Todorovich, who has been appointed chief of global brand partnerships.

In a statement, van Raemdonck said he saw “meaningful opportunity” on the path ahead, adding: “In close partnership with these newly appointed leaders and our colleagues across the organisation, we will navigate this process together with a continued focus on serving our customers and luxury brands. I look forward to serving as CEO and continuing to transform the company so that Saks Global continues to play a central role in shaping the future of luxury retail.”

The bankruptcy comes merely a year after Saks acquired Neiman Marcus Group and ultimately formed a major retail conglomerate initially designed to create “an unparalleled multi-brand luxury portfolio with tremendous growth potential”, Baker said at the time.

The following year proved to be tricky, however. Saks grappled with high debt and lower-than-expected sales as it navigated a business environment dampened by caution consumer spending on non-essential goods. A Chapter 11 filing was initially pitted as a “last resort” for the retail group, which sought to turnaround the business through widespread store closures, mass layoffs and financing commitments.