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In M&A transactions, the focus is often on getting to the finish line—negotiating terms, securing financing, and closing the deal. But experienced dealmakers know that signing on the dotted line is just the beginning. The true test of a transaction lies in what happens after the champagne corks have popped: Can the combined entity sustain operations? Will vendors and customers remain confident? Is there sufficient liquidity to weather integration challenges?
The collapse of the Saks Global-Neiman Marcus merger offers a stark reminder that beginning with the end in mind—anticipating post-close realities during deal structuring—is essential to long-term success. This article examines how liquidity challenges derailed what was intended to be a luxury retail powerhouse and distills key lessons for sponsors, strategic buyers, and their advisors.
Background
On January 13, 2026, Saks Global (“Saks”) filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas (Case 26-90103), with between $1 billion and $10 billion reported in both assets and liabilities.1 Saks, the largest multi-brand luxury retailer in the world (whose retail portfolio spans the 159-year-old brand Saks Fifth Avenue, Saks Off 5th, Neiman Marcus, Neiman Marcus Last Call, Bergdorf Goodman, and Horchow) also maintains a U.S. real estate portfolio spanning around 8.4 million square feet of owned or ground-leased property and is now restructuring over $3.4 billion in debt.2
Saks reported approximately $1.6 billion in revenue in the second quarter of 2025, but now faces mounting pressure from high-profile creditors, including Amazon, LVMH, and Chanel.3 These brands form Saks’s newly appointed creditors’ committee, which ensures that they will have a stronger voice during the bankruptcy restructuring.4 The creditors committee also includes Ermenegildo Zegna NV, Kering Americas, Brookfield Properties Retail, a labor union representing Saks employees, a logistics services supplier, and the Pension Benefit Guaranty Corporation.5 Additionally, the committee acts as the voice of all junior creditors, along with its members, with legal fees being charged to Saks throughout the bankruptcy case.6
According to court filings, Saks reportedly owes $136 million to Chanel, $60 million to Kering, maker of Gucci, and $26 million to LVMH, the parent to Louis Vuitton.7 Currently, Saks is sitting at $3.4 billion in debt. How did the luxury retail powerhouse arrive at this point? Mark Weinstein, the chief restructuring officer, specifically points to the 2024 deal between Saks and Neiman Marcus, where Saks acquired Neiman Marcus for $2.7 billion, only to file for bankruptcy just over a year later.8 After the deal closed, Weinstein remarked that there were “immediate liquidity challenges” creating an “unsustainable” capital structure.9 Funded by $2.2 million in junk bonds, the deal generated liquidity.10 However, once the transaction closed, and Saks and Neiman were left to pay off debts related to their agreement, there was no money left to pay Saks’ vendors.11 Bills were running late, and vendors were not being paid.12 The retailer’s inventory quickly diminished, as unsure vendors stopped sending their products. With inventory gaps driving away customers, cash flow plummeted, and the company found itself in the middle of a vicious, unsustainable cycle.
The Road Ahead for Saks
Although the merger between Saks and Neiman Marcus was intended to form a luxury retail powerhouse, it quickly turned into a financial nightmare. Still, the bankruptcy filing does not mark the end for the retailer. On February 20, 2026, Saks secured approval for a $1 billion loan from the U.S. bankruptcy court.13 The financing forms part of a broader $1.75 billion package authorized by the U.S. Bankruptcy Judge presiding over the case, Judge Alfredo Perez.14 Saks reports that it plans to use $600 million to pay off existing vendors, and as much as $330 million to be distributed to vendors with overdue invoices in the next two weeks.15 While Saks has begun closing some locations, not all retail locations will close.16 However, winning back vendor and customer confidence will remain an uphill battle, as well as their current financing plan.
What can be learned from the costly Saks-Neiman acquisition? Scale alone does not guarantee success. Saks’ pursuit of notoriety, and its ambition to become a dominant luxury player through the Neiman Marcus acquisition, may have obscured the transaction’s underlying fundamentals. Both companies entered the transaction facing financial pressures, and management seemingly underestimated the impact of those conditions on post-closing liquidity. The transaction failed to generate anticipated synergies and instead exposed department store structural weaknesses. The brands were also unable to differentiate and targeted overlapping customer bases. The transaction’s unraveling also showed the importance of vendor confidence. When Saks began missing vendor payments, inventory levels declined, along with sales. Even with court-approved financing, Saks and Neiman will need to rebuild vendor and customer trust, something that cannot be achieved through financing alone. Additionally, the transaction focused heavily on real estate value, which unlocked a combined $7 billion luxury real estate portfolio, while leaving retail synergies as an afterthought.17 Ironically, in December 2025, Saks began selling real estate assets, including the Neiman Marcus property in Beverly Hills, to generate liquidity.18
Conclusion
Although the long-term outlook for Saks remains uncertain, the transaction provides instructive guidance for future dealmaking. Sponsors and strategic buyers alike should maintain rigorous focus on post-close liquidity, vendor stability, and synergies aligned with the company’s main purpose. Transactions driven primarily by scale or asset value, without a credible path to sustainable cash flow and lacking in operational reality, are unlikely to deliver anticipated returns and risk unraveling. In an increasingly strained retail environment, deal fundamentals and not headline scale will separate a durable transaction from one that becomes a cautionary tale.
1. Saks Global Enterprises LLC, No. 9:26bk90103 (Bankr. S.D. Tex. filed Jan. 14, 2026)(Chapter 11 case pending); Kelly Kovack, Breaking Down the Saks Global Bankruptcy and the Path Forward, BeautyMatter, (Feb. 15, 2026), https://beautymatter.com/articles/breaking-down-the-saks-global-bankruptcy.
2. Kelly Kovack, Breaking Down the Saks Global Bankruptcy and the Path Forward, BeautyMatter, (Feb. 15, 2026), https://beautymatter.com/articles/breaking-down-the-saks-global-bankruptcy.
3. Phil Wahba, How a real estate scion’s risky dealmaking pushed Saks Global to the brink, Fortune, (Jan. 6, 2026), https://fortune.com/2026/01/06/saks-global-bankruptcy-debt-ceo-richard-baker/.; Dietrich Knauth, Amazon, Chanel appointed to represent Saks’ creditors in bankruptcy, Reuters, (Jan. 28, 2026), https://www.reuters.com/legal/litigation/amazon-chanel-appointed-represent-saks-creditors-bankruptcy-2026-01-28/.
4. Dietrich Knauth, Amazon, Chanel appointed to represent Saks’ creditors in bankruptcy, Reuters, (Jan. 28, 2026), https://www.reuters.com/legal/litigation/amazon-chanel-appointed-represent-saks-creditors-bankruptcy-2026-01-28/.
5. Id.
6. Id.
7. Id.; Saks Global Enterprises LLC, No. 9:26bk90103 (Bankr. S.D. Tex. filed Jan. 14, 2026)(Chapter 11 case pending).
8. Gabrielle Fonrouge, How Saks’ acquisition of Neiman Marcus plunged the company into bankruptcy: ‘Recipe for disaster’, CNBC, (Jan. 15, 2026), https://www.cnbc.com/2026/01/15/saks-acquisition-of-neiman-marcus-led-to-bankruptcy.html.
9. Id.
10. Id.
11. Id.
12. Id.
13. Saks Global Enterprises LLC, No. 9:26bk90103 (Bankr. S.D. Tex. filed Jan. 14, 2026)(Chapter 11 case pending).
14. Id.
15. Dietrich Knauth, Amazon, Chanel appointed to represent Saks’ creditors in bankruptcy, Reuters, (Jan. 28, 2026), https://www.reuters.com/legal/litigation/amazon-chanel-appointed-represent-saks-creditors-bankruptcy-2026-01-28/.
16. Gabrielle Fonrouge, How Saks’ acquisition of Neiman Marcus plunged the company into bankruptcy: ‘Recipe for disaster’, CNBC, (Jan. 15, 2026), https://www.cnbc.com/2026/01/15/saks-acquisition-of-neiman-marcus-led-to-bankruptcy.html.
17. Candace Carlisle, Saks-Neiman Marcus Deal Creates Sprawling $7 Billion Property Portfolio, CoStar News, (Jul. 5, 2024), https://www.costar.com/article/1040702285/saks-neiman-marcus-deal-creates-sprawling-7-billion-property-portfolio.
18. Brannon Boswell, Sale of Neiman Marcus flagship in Beverly Hills marks city’s biggest retail deal in years, CoStar News, (Jan. 13, 2026), https://www.costar.com/article/749509459/sale-of-neiman-marcus-flagship-in-beverly-hills-is-citys-biggest-retail-deal-in-years.; Mark Heschmeyer, Saks Global shifts leadership as it sells real estate and store brands with debt deepening, CoStar News, (Jan. 2, 2026), https://www.costar.com/article/1224416192/saks-global-shifts-leadership-as-it-sells-real-estate-and-store-brands-with-debt-deepening.
