Global clothing retailer secures US$500M financing for bankruptcy exit

Shoppers walk past a Saks Fifth Avenue OFF 5TH store in Tsawwassen, B.C., Canada.

Saks Global on Thursday said a group of bondholders has agreed to provide US$500 million in exit financing after the luxury retailer emerges from bankruptcy proceedings, which is expected by this summer.

The company had filed for Chapter 11 bankruptcy protection in January with $3.4 billion in debt, in one of the largest retail collapses since COVID, after its merger with Neiman Marcus caused cash shortfalls and inventory issues.

Saks said it continues to engage with its capital partners and other financial stakeholders on a plan of reorganization and anticipates its filing in the coming weeks.

Last month, the retailer said it got access to an additional $300 million of its $1.75 billion bankruptcy funding package, giving it sufficient liquidity to support operations.

It added that a group of bondholders also approved its five-year business plan.

The retailer in March said it would close 12 Saks Fifth Avenue stores and three Neiman Marcus locations. This follows the January decision to wind down 62 of its off-price operations, including Saks OFF 5th and the remaining Neiman Marcus Last Call stores.

The company on Thursday also said its inventory has improved after more than 650 brand partners resumed shipping, which has aided customer engagement.

(Reporting by Neil J Kanatt in Bengaluru; Editing by Vijay Kishore)