Fashion People What in the World Is Really Going on With Saks Fifth Avenue?
May 30, 2025
Bill Cohan, an expert on finance and author of Puck’s Dry Powder email, dives into the tumultuous state of Saks Fifth Avenue. He explores the looming threat of Chapter 11 bankruptcy for Saks and other luxury retailers like Neiman Marcus. Cohan discusses the harsh realities of the retail business and the impressive strategies of Bernard Arnault. He also reveals his favorite spots in Paris, blending finance with travel tips in a captivating conversation.
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Saks Debt Troubles Begin Early
- Saks Global's merger and debt issuance left them with an 11% coupon bond trading as high-risk debt.
- Stretching payables from 30 to 90 days indicated severe financial stress early on.
Amazon Luxury Fashion's Challenges
- Amazon's luxury fashion efforts suffer from lack of big brand adoption and low consumer interest.
- Selling Saks products via Amazon fashion doesn't align with luxury market dynamics.
Overoptimism in Saks Projections
- Saks overestimated inventory growth post-merger due to strained vendor relations.
- Bond prospectus projections were overly optimistic, contributing to investor losses.
