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Dive Brief:
Saks Global on Tuesday announced it will close eight Saks Fifth Avenue stores – in Birmingham, Alabama; Columbus, Ohio; East Rutherford, New Jersey; New Orleans; Philadelphia; Phoenix; Richmond, Virginia; and Tulsa, Oklahoma. Just one Neiman Marcus store – in Boston – will close.
The luxury department store company, which filed for bankruptcy last month, is also shuttering 14 of its Fifth Avenue Club personal styling locations. Two will remain open, and another, in Palm Beach, Florida, will launch in the fall.
The company is folding its online-only Horchow home goods retailer into its Neiman Marcus home e-commerce operation. Last month, Saks Global announced it would close most of its off-price stores.
Dive Insight:
The 2024 merger of Saks Fifth Avenue and Neiman Marcus Group was meant to provide scale and synergies by combining the forces of America’s three biggest luxury department store names.
In a court filing Tuesday, Saks Global Chief Restructuring Officer Mark Weinsten acknowledged what several observers have noted for months, that the tie-up also came with an immediate problem: 40% of Saks and Neiman locations are quite close to each other, sometimes anchoring the same malls.
“Given the breadth of luxury retail chains that make up the Global Debtors’ brand portfolio, their stores face competition not only from other luxury retailers and e-commerce experiences, but also, in certain markets, from one another,” he said. “Given this landscape, the Global Debtors and their advisors have critically assessed the financial and operational performance of their retail locations to identify the strongest stores within their portfolio.”
Saks Global’s two major luxury department stores compete against each other in more than a dozen spots across the U.S.
Eight Saks Fifth Avenue stores and one Neiman Marcus store will shutter as part of the company’s bankruptcy.
Saks Fifth Avenue is taking the brunt of that, with eight of the nine closures hitting that banner. Saks Global’s two Bergdorf Goodman stores — across the street from each other in New York City — are unaffected by the closure plans announced Tuesday. Even the downtown Dallas Neiman Marcus store — open after a bruising battle with civic leaders last year — survived this downsizing.
But perhaps not for long. Weinsten told the U.S. Bankruptcy Court for the Southern District of Texas that Saks Global continues to evaluate its fleet and that more locations may need to close.
“Given the ongoing nature of these evaluations and the need to act quickly to maximize the value realized from the store closings, I believe the Court should permit the Global Debtors to supplement the list of stores they plan to close without the need for further relief from the Court,” he said.