As pressure continues to mount on the high-end retail sector, it was announced earlier this month that a luxury department store had filed for bankruptcy protection – the first major retailer to do so this year. Saks Global, the parent company of Saks Fifth Avenue, entered Chapter 11 proceedings on January 14 in the US Bankruptcy Court for the Southern District of Texas.

Saks Global operates about 125 stores spanning about 13 million square feet in the US and owns or controls ground leases at 39 of them, according to its court filing. Its retail empire includes prime locations on high streets such as Fifth Avenue in Manhattan and luxury corridors in Beverly Hills, California, as well as top‑tier malls like Bal Harbour Shops in Florida. Saks Global said the filing was due to its need to restructure under the weight of significant debt taken on after its 2024 acquisition of rival Neiman Marcus.

Chapter 11 of the US Bankruptcy Code is a court-supervised reorganisation process allowing businesses or individuals to restructure debts while continuing operations, with the ultimate goal of emerging financially healthy. It halts creditor lawsuits via an automatic stay, enabling the debtor to remain in control as a “debtor in possession” (DIP) to develop a plan to become profitable.

The filing comes after weeks of leadership upheaval at the top of the business. Earlier this month, Marc Metrick stepped down as chief executive, with executive chairman Richard Baker briefly taking over the role. However, less than two weeks later, Mr Baker also stepped down as CEO as the company prepared for court protection.

Saks Global said former Neiman Marcus chief executive Geoffroy van Raemdonck would then lead the company through the bankruptcy process, who said the restructuring offers an opportunity to stabilise operations and reposition the group for the future of luxury retail.

Saks Fifth Avenue and Neiman Marcus have collectively incurred a whopping $4.7billion (£3.5billion) in total debt.

In a major update on Monday (January 26), Saks Global said it had won court approval to hire a liquidator. A chief restructuring officer and independent manager have been appointed to manage the process, as the online firm may owe money to its parent company, Drapers reported.

Saks Off Fifth is independently managed, and its inventory does not include any of Saks Global’s physical stores, the chain’s attorney Michael K. Riordan said in court on January 23.

In a statement announcing the Chapter 11 process, Saks Global said it had secured $1billion (£790million) in debtor-in-possession financing to keep the business operating during the restructuring. The company added that its bondholders have also committed an additional $500million (£395million) in funding once it emerges from bankruptcy, to support a broader turnaround of the business.