Saks Fifth Avenue Closes 12 Stores by End of May

Saks Fifth Avenue is closing 12 more stores, leaving only 13 locations. This is a big change from its previous size.
By Newsroom | Business, Retail |

Saks Global is dramatically reducing its physical footprint, announcing the closure of 12 more Saks Fifth Avenue locations and three Neiman Marcus stores. This latest wave of closures, disclosed on Friday, brings the total number of remaining Saks Fifth Avenue stores down to just 13. The company, which filed for bankruptcy earlier this year, states these moves are intended to focus on more profitable ventures and trim debt.

The strategic shift is stark: fewer stores, a focus on higher-end, profitable locations, and a reliance on e-commerce. This downsizing also includes the closure of all but 12 of its Saks OFF 5th locations, which will reportedly serve as a channel for residual inventory from Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman.

Store Numbers Diminish

This most recent announcement adds to earlier closures, including eight Saks Fifth Avenue stores and one Neiman Marcus store shuttered last month. In addition to the department store closings, 14 standalone Fifth Avenue Club personal styling suites are also being shut down across various states. The affected Saks Fifth Avenue locations include stores in cities such as Chicago, Las Vegas, and San Antonio.

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Vendor Strain and Financial Woes

The financial strain on Saks Global is evident. Reports indicate that many vendors stopped shipping products due to the company's failure to pay bills over an extended period. This, coupled with weak sales, led to the company defaulting on vendor payments and consequently losing out on inventory. The company attributes the closures to factors like "performance and lease economics."

Background: Bankruptcy and Restructuring

Saks Global entered Chapter 11 bankruptcy proceedings earlier this year. In February, the company announced it had secured a $1.75 billion financing package, intended to strengthen its financial standing and prepare for a more stable future. At that time, the company also indicated it was "refining the Saks Fifth Avenue and Neiman Marcus store footprint to focus on profitable locations with the highest growth potential." The current closures appear to be the realization of this stated strategy, signaling a significant contraction of its brick-and-mortar presence in favor of its online operations and select, high-performing physical sites. The remaining stores and e-commerce platforms for Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman are stated to be operating as usual. The stores slated for closure are expected to remain open until the end of May.

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Frequently Asked Questions

Q: Why is Saks Fifth Avenue closing 12 more stores?
Saks Fifth Avenue is closing 12 stores by the end of May as part of a plan to reduce debt and focus on more profitable locations. The company filed for bankruptcy earlier this year and is restructuring its business.
Q: How many Saks Fifth Avenue stores will be left after the closures?
After closing 12 more stores, only 13 Saks Fifth Avenue locations will remain open. This is a significant reduction from its previous number of stores.
Q: When will the 12 Saks Fifth Avenue stores close?
The 12 Saks Fifth Avenue stores that are closing are expected to remain open until the end of May. This is part of a larger plan to shrink the company's physical presence.
Q: Which cities are affected by the Saks Fifth Avenue store closures?
Some of the Saks Fifth Avenue stores closing are located in cities like Chicago, Las Vegas, and San Antonio. The company is also closing 14 styling suites and some Neiman Marcus stores.
Q: What is happening with Saks OFF 5th stores?
Saks is also closing most of its Saks OFF 5th outlet stores, leaving only 12 open. These remaining stores will be used to sell leftover items from Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman.