Business

Company behind Saks Fifth Avenue exits bankruptcy with massive job cuts

Even though Saks Fifth Avenue is no longer in Chapter 11 bankruptcy, there are plenty of changes ahead for the retailer including a new focus both in-store and online. ©Image Credit: Wikicommons / Paul Sableman

Here's the good news: Saks Global, owner of Saks Fifth Avenue, has survived and exited its bankruptcy filing. The bad news is that it took a heavy hit and will need to make massive job cuts to stay afloat.

Luxury retailers aren't immune to a changing landscape

With many retailers noticing a big change in consumer habits, rising operational costs, and an increase in competition, luxury department stores have been forced to weather one storm after another.

Saks Global is no exception, and in January it started the Chapter 11 process. There were missed payments, liquidity problems, store closures, and hundreds of layoffs. It all became too much for the retailer to handle.

A new name and a new start

Unlike many other retailers that don't have a silver lining at the end, it looks like Saks Global, and in effect Saks Fifth Avenue, will survive another few years.

The company exited Chapter 11 bankruptcy on June 26 and has a new name—Exemplar Luxury Group (ELG). ELG is a collection of luxury retailers that now includes Bergdorf Goodman, Neiman Marcus, and Saks Fifth Avenue.

This restructuring has managed to reduce 75% of its debt, improve liquidity, and bring in new capital from stakeholders and capital partners.

As part of the reset, the iconic luxury retailer had to close many of its brick-and-mortar stores, leading to more than 1,800 job cuts.

What to expect moving forward

As a customer, what should you expect the next time you shop at Saks Fifth Avenue? On the surface, it doesn't sound like much, but expect things to stay fluid.

The company says it wants to focus on personalized customer experiences, remote selling services, e-commerce, and stronger brand relationships. You may find better inventory variety, curated assortments, and better overall experiences as part of the push to stand out from the competition.

Lives to see another day

Despite Saks Global surviving, it sounds like things are going to change both in-store and online, and to the benefit of shoppers who demand elevated experiences, inventory, and pricing.

Source: TheStreet

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