Saks Global announces the departure of its CEO ahead of a possible bankruptcy

Saks Global announced an immediate change in its leadership at a time of high financial pressure for the luxury retailer. Marc Metrick will step down as CEO as the company prepares for a possible low bankruptcy filing that could be filed in the coming days. Executive chairman Richard Baker assumed CEO duties, the company reported.

An ambitious merger and its consequences

Metrick, with nearly three decades at Saks, spearheaded the $2.7 billion merger between Saks Fifth Avenue and Neiman Marcus in 2024. The deal sought to create a larger-scale player in commerce luxury retail, with the ability to optimize costs and strengthen relationships with high-net-worth shoppers. However, after taking on the debt associated with the merger, the company faced a more adverse environment marked by lower demand for luxury goods and growing tensions with suppliers.

Negotiations with creditors and signs of stress

The company is in talks with creditors to secure financing for a bankruptcy proceeding, according to people familiar with the negotiations. The expectation is that the filing will be made next week, after Saks defaulted on interest payments of more than $100 million to bondholders this week.

Weak sales and operating pressure

Operating performance has deteriorated. In the quarter ended Aug. 2, sales fell more than 13% year-on-year to $1.6 billion, below the company's own expectations. The net loss widened to $288 million. In June, Saks raised $600 million in capital from bondholders to cover a debt maturity, while uncertainty contributed to the value of its bonds hitting new lows in December.