Business
How Saks’ acquisition of Neiman Marcus plunged the company into bankruptcy: ‘Recipe for disaster’
For more than a decade, the former executive chairman of Saks Global dreamed of adding Neiman Marcus to his collection of legacy department stores, believing the combined entities would create a luxury powerhouse strong enough to defy changes dragging down the industry.
Instead, Richard Baker’s $2.7 billion acquisition of Neiman Marcus in 2024 ultimately plunged the company into bankruptcy just over a year after the transaction closed. From the very start, the company was struggling to pay its bills — which led to angry vendors and little room for error.
In a Wednesday declaration filed in Houston’s bankruptcy court hours after Saks filed for Chapter 11 bankruptcy protection, chief restructuring officer Mark Weinsten wrote that the deal led to “immediate liquidity challenges” and created an “unsustainable” capital structure.
Mickey Chadha, Moody’s Ratings vice president of corporate finance, called it a “recipe for disaster.”
“You had the two companies that weren’t doing great, and then you combine the two companies and put on a large amount of debt,” said Chadha. “It was an unsustainable capital structure right from the beginning.”
The deal, funded with $2.2 billion in junk bonds, brought an influx of liquidity. But once the transaction closed and both companies paid debts related to the agreement, there wasn’t enough money left over to pay Saks’ vendors.
With bills running late, vendors were less willing to send Saks inventory. Soon, the retailer lacked an adequate assortment to drive sales, leading the situation to deteriorate.
“This created inventory gaps which then drove customers away and caused revenue and cash generation to plummet. This classic vicious spiral put the business in an unsustainable position,” retail analyst Neil Saunders, the managing director of GlobalData, wrote in an emailed note.
“While the previous management team always presented the merger as an opportunity to create a luxury powerhouse, behind the glossy facade the deal was an entanglement of complex financial engineering that made it impossible for the group to execute their stated vision.”
With Neiman Marcus, Bergdorf Goodman and Saks Fifth Avenue under the new Saks Global umbrella, the company expected to see $600 million in run-rate synergies over the five years after the deal closed, Weinsten said. But soon after the transaction closed, Saks realized integrating Neiman Marcus was going to be more difficult, and costly, than expected.
Just ahead of last year’s critical holiday shopping season, Saks was “affected by one-time merchandising system integration issues,” which disrupted inventory flows at Neiman Marcus and Bergdorf Goodman at a time when sales and inventory were already at a “seasonal low point,” Weinsten wrote.
Saks’s borrowing was asset based, meaning loans were backed by its inventory. Once the company had less merchandise on hand, Saks could not borrow as much as it needed to. With less liquidity, it couldn’t pay vendors according to the terms they agreed upon.
Soon, $244 million in “catch-up payments” Saks had scrounged up to pay its vendors was “negated,” and once again the company was struggling to stock its shelves with the assortment its wealthy customers had come to expect, Weinsten said.
By the end of the second fiscal quarter on Aug. 2, inventory was 9% below the previous year’s levels, and it had over $550 million less in inventory receipts than it previously expected. That further reduced its liquidity under the terms of its asset-based loan.
It spelled trouble for the key holiday season because Saks couldn’t do what a retailer always needs to do to remain competitive: “chase” inventory so it had in-demand and on-trend items available during the busiest time of the year.
“You can’t really sustain that much debt just on synergies,” said Chadha. “You have to grow the top line, increase your sales and increase profitability in order to sustain that much amount of debt.”
Four months after Saks secured new financing, it missed an interest payment to bondholders at the end of December. Two weeks later, it was bankrupt.
‘Not a declining brick-and-mortar business’
In Weinsten’s declaration to the court, he made it clear it was Saks’ liquidity challenges, and its subsequent issues with vendors, that plunged it into bankruptcy — not larger issues related to the luxury goods market or the decline of department stores.
“[Saks] is not a declining brick-and-mortar business,” Weinsten wrote. “There are strong indications that the Debtors’ most lucrative customers are continuing to spend through their retail channels … in that respect, the constraints faced by the Company are not driven by declining demand; where product is available, performance has remained robust.”
He said the company does not need to make significant investments in marketing or capital expenditures to improve sales trends. Also, the synergies it expected to achieve through its merger with Neiman Marcus are starting to materialize more quickly.
By the end of its current fiscal year 2025, Saks had predicted run-rate synergies of approximately $150 million, but it’s now expecting that number to grow to $300 million. It’s seeing strong retention rates with its top customers and positive sales when inventory is in stock.
“This indicates that the Company’s challenges are tied to inventory availability and vendor confidence,” Weinsten said. “Not underlying demand for luxury goods.”
Through its restructuring plan, which is subject to court approval, Saks has secured $1.75 billion in new financing and has pledged to make “go-forward” payments to vendors, honor all customer programs and continue staff payroll and benefits. A portion of the funds, $500 million, will be available to the company after it emerges from bankruptcy, which it said it expects to do later this year.
Whether it’ll be able to win back its vendors and get the business back to growth will fall on the company’s new CEO, former Neiman Marcus CEO Geoffroy van Raemdonck.
While the company’s executives assert conditions are strong for a rebound as long as the company replenishes its balance sheet, department stores aren’t what they used to be. Luxury brands have their own websites and stores and are no longer as reliant on wholesalers like Saks and Neiman Marcus as they once were.
“They’re going to have to do something drastic, right? They can’t survive with this financing, just as is … because just filing is not going to change what Saks really does. It’s not going to get people into the door to buy more stuff,” said Chadha. “You’re going to have to change the overall operation, so it’s going to take a while. It’s an uphill battle. They’re not in the best space. It’s a department store, as it is.”
Restaurant group Various Eateries is poised for a significant expansion, announcing plans to rebrand as the Coppa Collective and venture into the pub sector. The company, known for its Coppa Club and Noci venues, confirmed the name change alongside a deal to acquire a portfolio of pubs with rooms from Grosvenor Pubs and Inns.
The acquisition of four initial sites is expected to be finalised on or around 23 March, with an additional agreement for a potential fifth location. The pubs joining the new collective are Wild Thyme & Honey in the Cotswolds, The Hare & Hounds in Berkshire, The Stag on the River in Surrey, and The Wellington Arms in Hampshire.
Furthermore, terms have been secured for the potential acquisition of The Queen’s Head, also situated in Surrey.
This venue is subject to an “asset of community value” process, meaning it can only be sold after the relevant statutory notification and moratorium period has expired, which could take up to six weeks.
The group, which was founded by Punch Pubs founder Hugh Osmond, will pay £11.25 million for the initial four pubs once the deal completes.
Various Eateries will create a third brand within its portfolio, called The Linwood Collection, after completing the deal.
The hospitality group currently runs 20 sites, including restaurant, club house and hotel venues.
The deal comes a month after the business said it was considering merger and acquisition opportunities in a bid to drive growth.
Mark Loughborough, chief executive of Various Eateries, said: “Linwood marks an important step in the evolution of the group.
“We are bringing into the business a small collection of premium pubs with rooms that have earned their reputations the right way, through great hospitality, careful attention to detail and a real sense of place.
“This is also a format we know well and rate highly in the current market.
“Premium pubs with rooms combine food and drink with accommodation and a broader, destination-led appeal.”
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The layoffs account for 3-4% of Flipkart’s workforce, which is higher than the company’s practice of letting go of 1-2% of employees in the lowest performance bracket every year.
Flipkart Layoffs 2026.
Flipkart Layoffs 2026: Flipkart, the Walmart-owned e-commerce giant, has reportedly asked around 400-500 employees to exit the company this year following its annual performance review process. According to a report by The Economic Times, the layoffs account for roughly 3-4% of Flipkart’s workforce, which is higher than the company’s usual practice of letting go of 1-2% of employees in the lowest performance bracket every year.
Why Has Flipkart Laid Off Employees?
Responding to queries, Flipkart said the move is part of its routine evaluation process. “Flipkart conducts regular performance reviews aligned with clearly defined expectations. As part of this process, a small percentage of employees may transition from the organisation. We are supporting affected employees with transition support,” the company said, according to Mint.
Layoffs Across Teams, Hiring Continues For Senior Roles
The job cuts have reportedly impacted employees across multiple departments and job levels. At the same time, the company continues to recruit senior executives as it prepares for a potential initial public offering (IPO).
According to a report by ANI, Flipkart has recently strengthened its leadership team with several senior appointments.
These include Somnath Das as vice-president (supply chain), Digbijay Mishra as vice-president (corporate communications), Vipin Kapooria as vice-president (business finance), Yogita Shanbhag as vice-president (human resources), and Amer Hussain as vice-president (supply chain for its grocery and quick-commerce businesses).
Flipkart Preparing For India IPO
In December 2025, Flipkart received approval from the National Company Law Tribunal to shift its legal domicile from Singapore to India, a key step ahead of a potential domestic listing.
The restructuring involved merging eight Singapore-based entities into Flipkart Internet Pvt Ltd, simplifying the group’s holding structure across businesses such as fashion, health and logistics.
Loss Widens Despite Revenue Growth
Financial data shows that Flipkart continues to expand its business, although losses have widened.
According to data from Tofler, Flipkart India reported a consolidated loss of Rs 5,189 crore in FY25, compared with Rs 4,248.3 crore in FY24.
However, revenue from operations rose 17.3% to Rs 82,787.3 crore, up from Rs 70,541.9 crore a year earlier.
Total expenses also increased 17.4% to Rs 88,121.4 crore, largely due to higher stock-in-trade purchases, which climbed to Rs 87,737.8 crore, compared with Rs 74,271.2 crore in the previous financial year.
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March 07, 2026, 14:51 IST
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Global businesses are feeling the impact of the escalating conflict between the United States, Israel, and Iran, as rising energy prices and disrupted trade routes create uncertainty across markets.
Oil and Energy Prices Surge
The conflict has triggered a sharp rise in global oil and gas prices. Brent crude prices have climbed close to $90 per barrel, raising concerns among businesses and policymakers about inflation and higher operating costs.
Industry leaders warn that prolonged price increases could affect nearly every sector of the global economy.
Higher fuel costs are already pushing up prices for transportation, manufacturing, and consumer goods.
Trade Routes Under Pressure
Shipping routes through the Strait of Hormuz, which handles about 20% of global oil supplies, have slowed significantly as tensions escalate.
Air travel routes across the Gulf have also been disrupted, creating delays for cargo shipments and international flights.
Industries Facing Supply Disruptions
Several industries are beginning to feel the effects:
Aluminium production has been disrupted as shipments through the Gulf face restrictions.
Helium supplies, crucial for semiconductor manufacturing, could also be affected.
Chemical and energy-intensive industries in Europe are already reducing production due to rising gas prices.
The Gulf region accounts for roughly 8% of global aluminium production, making any supply disruption a major concern for global manufacturing.
Businesses Prepare for Economic Impact
Major companies are now hedging energy costs and reviewing supply chains to manage the uncertainty.
Analysts warn that if oil prices reach $100 per barrel, global economic growth could slow significantly.
Some financial institutions estimate global growth could drop by 0.4 percentage points if the conflict persists.
Risk of Another Energy Crisis
Experts say the situation highlights how vulnerable global markets remain to geopolitical shocks.
Business leaders warn that energy volatility, supply chain disruption, and rising inflation could lead to a new global economic slowdown if the conflict continues for an extended period.
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