Social Currency with Sammi Cohen When Luxury Goes Broke: The Saks Bankruptcy
Jan 16, 2026
Explore the dramatic downfall of Saks Fifth Avenue, once a luxury icon. The podcast covers the flawed Neiman Marcus merger, highlighting the junk-bond debt that exacerbated their financial woes. Discover how vendor relationships faltered, leading to stalled payments and inventory shortages. Leadership turmoil and real estate maneuvering were key factors, revealing deeper issues in retail strategy. Ultimately, Saks' Chapter 11 filing serves as a cautionary tale about the pitfalls of financial engineering and the myth that some brands are 'too iconic to fail.'
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Scale Can Amplify Risk
- The Neiman Marcus merger amplified risk instead of fixing Saks' economics.
- High-yield debt left virtually no margin for error when luxury demand softened.
Vendors Left Waiting
- Vendors waited months or more than a year for massive wholesale payments from Saks.
- On Valentine's Day, Mark Metrick announced 90-day payment terms and delayed installments for overdue balances.
Debt Restructuring Hurt Vendors
- When Saks missed a nine-figure interest payment, bondholders gained priority over vendors.
- That restructuring raised the risk vendors would not get paid in a bankruptcy.