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.”
Business
US justice department drops probe into Fed chairman Jerome Powell
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Business
Intel bags big gains! Chipmaker’s shares jump 26% on blockbuster results; how Trump admin benefits – The Times of India
Intel share price soared sharply on Friday after the chipmaker delivered a first-quarter performance that exceeded market expectations. And the win was not just for the chipmaker, but also the whole of US!The stock climbed 26.7% during trading on Friday, marking what could be its strongest single-day gain since 1987. Momentum continued after the closing bell, with shares rising a further 20% in after-hours trading as investors reacted to signs of a sustained turnaround driven by artificial intelligence.Intel reported revenue of $13.58 billion (€11.6bn) for the quarter, ahead of the $12.3 billion (€10.5 bn) forecast and up 7.2% from a year earlier. Adjusted earnings per share came in at $0.29, far exceeding expectations of $0.01.A key contributor to this performance was the company’s Data Centre and AI (DCAI) division, which delivered revenue of $5.05 billion (€4.2bn), up 22.4% year-on-year and well above analyst estimates of $4.41 billion (€3.77bn). The results indicate strong demand for Intel’s Xeon 6 processors and Gaudi 3 AI accelerators, particularly among enterprise clients and cloud service providers.Chief executive Lip-Bu Tan pointed to a broader shift in artificial intelligence usage as a major factor behind the growth. He said, “the next wave of AI will bring intelligence closer to the end user, moving from foundational models to inference to agentic.” He added, “This shift is significantly increasing the need for Intel’s CPUs and wafer and advanced packaging offerings.”The company also issued an upbeat outlook for the second quarter, forecasting revenue in the range of $13.8 billion (€11.8billion) to $14.8 billion (€12.6billion), surpassing investor expectations of $13 billion (€11.1billion).
But how is Washington winning?
The rally has had a direct impact on the US administration’s investment in Intel. In 2025, during a period of severe financial strain for the company, the administration of Donald Trump acquired a 9.9% stake in a move aimed at stabilising the business. The government invested $8.9 billion (€7.8bn) at a share price of $20.47 (€18.01), with $5.7 billion (€5bn) of that amount coming from previously approved but unpaid grants, according to the Euro News.At the time, Intel was facing multi-billion dollar losses and operational challenges, prompting concerns over its viability. As part of the intervention, the company cancelled planned factory projects in Germany and Poland, redirected focus towards US-based manufacturing, and reduced its global workforce by 25%, cutting around 25,000 jobs.Following the latest jump, Intel’s shares are now trading at $81.3 (€71.5), representing an increase of nearly 300% since the government first took its stake. The sharp rise highlights how the company’s improved financial performance has translated into substantial gains for the US administration.
Business
The investment issues Labour must fix before the public can back its bid to join in
On the whole, Britain is not a nation of investors and the government wants that to change.
Following on from Rachel Reeves’ plans last year, the advertising campaign to create more retail investors is underway and with further changes afoot, the overall picture is one of Labour steering savers towards understanding why, and how, they can create better long-term returns with their money.
The cut to the cash ISA limit, however crude and unpopular, is one such upcoming change. We’ve just entered the final year of the £20,000 allowance being able to be put entirely into a cash ISA; as of April 2027, £8,000 of it will be reserved for investing-only. For those who don’t save over that amount annually it’ll make no material difference, but even the existence of the change can be argued is a prod to the consciousness of people to wonder if they should be doing something else entirely.
Then there’s targeted support.
Among industry insiders there is hope this could make a material difference, given time – in essence, those who have significant savings in cash being able to be spoken to by their bank or provider over other options, potentially including investing.
At Innovate Finance this week, a key summit of UK FinTech Week,The Independent heard from a senior executive at one neobank that the average client with them had savings in excess of £15,000 – precisely the sort of consumer who could benefit from targeted support to explain how, over the long term, they might be better off putting a portion of that excess cash into… well, something other than cash, which loses its value over time due to inflation.
Another suggested an uptick in app users branching out from just having current and savings accounts, to other products within their sphere including stocks and shares ISAs – where investing returns will be tax free for consumers.
Economic secretary to the Treasury Lucy Rigby launched the nationwide ad campaign, along with chancellor Ms Reeves, at the London Stock Exchange on Thursday.
“With greater awareness of the benefits of investing, more people will be able to make informed decisions about how to make their savings work harder for them,” Ms Rigby said. “That will mean greater prosperity and financial resilience for households across the country and strengthened domestic capital markets too.”
The aforementioned plans and prospects certainly all align with raising awareness. That is a first step.
But there are greater key issues to deal with.
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The advert campaign with Savvy the squirrel – conversational cab rides, explain-it-all website and more – will hopefully fill some painful gaps in the first instance around British people’s knowledge around the subject. Unlike in the US and several European countries, where investing is fairly commonplace, in the UK it’s not often spoken about, let alone fully understood.
Research from Barclays and their Investment Readiness Index showed this week that over a third of people (34 per cent) say fear of losing money is their main reason for not starting to invest, while nearly a quarter (23 per cent) said they believed there was a chance that a portfolio of well-known global companies could become “totally worthless” within five years.
Barclays’ report added for context that outcome was “an extremely unlikely” one.
But to really change some of those would-be investors’ minds, perhaps the response should have been more blunt. Perhaps the Treasury, the government and the campaign as a whole could stand to be a bit more…direct.
There is, in all probability, next to no chance that such a mix of companies would become worth zero in five years – unless something genuinely catastrophic happens to the world in which case we’ve all got more important issues to deal with than our portfolio performance. Maybe the Barclays report itself could likewise have benefited from feeling more freely able to state as such?
So, yes, financial education is absolutely one part, but so too is the language and understanding and framing of risk for people.
Articles, videos, all the learning activities across the web and within companies to help introduce people to investing – in every one of them you’re liable to find the disclaimer-style warning along the lines of: investments can go up as well as down, you may get back less than you invest and so on. Some find it off-putting to begin with, some barely even notice it.
In the words of the FCA, you must always “give a balanced impression of the benefits and risks of an investment product or service”.
That same pointing-out-of-the-risks wording and tone is another aspect which is being re-evaluated and could be switched up.
Now, while nobody wants that removed or watered down unduly to the point that bad actors or bad products are being pushed on newly introduced people to investing, there is still a misrepresentation of what risk means – it’s not always about you could lose all your money.
And, the reward (in theory) for taking on board risk is the possibility for higher returns, over time, than just cash alone (through interest) would give you.
Industry insiders have long also pointed out that the same – or reverse – warning is not applied to cash savings products: the risk here being you lose buying power over time due to inflation.
So language, as well as education, must remain on the table to improve and perhaps nudge people more forcefully towards a choice which helps them, similarly to reminding them to check employer contributions to their workplace pensions or taking out travel insurance before they fly.

There will still be one remaining gap though, even after people tentatively read the info, breathe in the adverts and eventually follow Savvy the squirrel down a new journey to take the plunge in investing: where are those people starting?
The ad campaign will not direct people to choose a particular platform or product, though many – Barclays, Hargreaves Lansdown, NatWest and more – are sponsoring the campaign and will be placed on the website as a result. But people still have to choose, and that particular analysis paralysis point has already left many ready to take the first steps, but unsure where to place their feet.
There are more new stocks and shares ISA providers available, loads of low-cost platforms as well as established, recognised names to choose from and deciding which suits any given person’s initial investment plan is as much a key decision as parting with their first few pounds in the first place.
It is important, for the long-term wealth of families, that more people start to invest. It is a positive thing that more information is therefore being pushed in front of them, to be able to make that call in an informed fashion.
But the reason it’s all needed in the first place is an overabundance of caution, a generational stepping-away from investing as a run-of-the-mill part of individual money management. Getting Brits back on board might therefore require less, not more, of that gentle approach to remedy the situation.
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