In a stunning development for the luxury retail sector, Saks Global Enterprises is reportedly planning to file for Chapter 11 bankruptcy protection as soon as this Sunday, January 10, 2026, according to individuals with direct knowledge of the matter.
A Storied Brand on the Brink
A potential bankruptcy filing would represent a dramatic and rapid descent for Saks, a retailer whose history spans more than 150 years. The news comes just one year after the company embarked on an ambitious turnaround strategy that included a plan to acquire competitor Neiman Marcus. The company's downward spiral has prompted concerned shoppers to rush to redeem gift cards and loyalty perks, while also casting a harsh spotlight on decisions made by its leadership team, including Executive Chairman and CEO Richard Baker.
The move toward Chapter 11 is proceeding without a finalized restructuring agreement, with the intention of crafting one in the weeks following the filing, said the sources, who requested anonymity due to the private nature of the discussions. While the filing is considered highly likely in the coming days, the plans remain fluid and the timing could still shift.
Financing Package and Missed Payment
A critical element of the potential bankruptcy process is a debtor-in-possession (DIP) financing package worth approximately US$1.25 billion, which Saks is in advanced talks to secure with its creditors. This funding is essential to keep the business operational during bankruptcy proceedings and to repay past-due payments to vendors. Negotiations for this lifeline have been contentious in recent weeks as lenders grew increasingly frustrated with the company's deteriorating financial situation and its management.
The proposed DIP financing would involve holders of about 75% of Saks’ special purpose vehicle notes and a majority of its second-out debt providing a roughly US$1 billion new-money loan to support the bankruptcy process. The plan also includes rolling up a portion of its existing first-out and second-out debt—obligations stemming from a complex deal in June where creditors provided hundreds of millions more to reorganize the repayment line.
Furthermore, lenders to its asset-based loan could roll up their debt to supply an extra US$250 million in liquidity. There are also discussions about noteholders injecting an additional US$500 million into the business once it emerges from bankruptcy as a going concern.
The Path to Insolvency
The looming bankruptcy follows Saks's failure to make an interest payment exceeding US$100 million on December 30, 2025. Prior to missing that payment, the cash-strapped retailer had been exploring alternative methods to bolster its liquidity, such as securing emergency financing or selling off assets. However, sources indicate that a Chapter 11 filing is now seen as virtually unavoidable because the company's cash requirements are too severe for other options.
Securing a sufficiently large financing package to navigate Chapter 11 would be a significant, though partial, victory for Saks. The retail giant's situation has drawn attention from distressed-debt investors, some of whom are also creditors to recently bankrupt auto-parts supplier First Brands Group and have expressed fury over rapid losses in that case.
A representative for Saks did not immediately respond to requests for comment. A spokesperson for the company's financial adviser, PJT Partners Inc., declined to comment.
