- Saks Fifth Avenue faces severe liquidity issues—$275M overdue to suppliers, prolonged payment delays, and falling revenue, raising bankruptcy concerns.
- Industry-wide retail distress: luxury demand softens, store closures and bankruptcies rise, forcing malls and retailers to adapt or risk collapse.
In the glittering world of high-end department stores, where marble floors and designer labels once promised endless indulgence, a sobering reality is unfolding.
Saks Fifth Avenue, the 123-year-old luxury retailer synonymous with Manhattan glamour since its 1924 flagship opening on Fifth Avenue, is grappling with severe financial headwinds that have analysts sounding alarms about a potential Chapter 11 bankruptcy filing.
It’s a stark reminder that even the most storied names in American retail aren’t immune to the brutal forces reshaping the industry—from e-commerce dominance to shifting consumer tastes and lingering economic pressures.
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The trouble at Saks isn’t coming out of nowhere.
According to recent financial disclosures shared during a bondholder call, the company is sitting on $275 million in overdue payments to suppliers for the 12-month period ended February 1, 2025.
That’s a massive backlog that’s left vendors fuming and, in some cases, halting shipments altogether.
Days Beyond Terms (DBT) metrics—essentially a measure of how late a company pays its bills—paint an even grimmer picture.
Saks has consistently lagged behind the industry average of 10-12 days, with delays stretching to 27 days in November 2024, peaking at 41 days in January and March 2025, and hitting 39 days in both August and September 2025.
“This level of payment delinquency, especially when sustained over an extended period, is a red flag for underlying liquidity issues,” said Ragini Bhalla, head of brand and spokesperson for Creditsafe, in an analysis of the company’s public filings.
The Numbers Don’t Lie
Saks Global, the parent entity that encompasses Saks Fifth Avenue, isn’t helping its case with topline numbers either.
Second-quarter revenue plunged more than 13% year-over-year to $1.6 billion, while net losses ballooned to $288 million.
The company chalked up about $100 million in losses for the full fiscal year, a figure exacerbated by the ongoing integration headaches from its $2.7 billion acquisition of Neiman Marcus and Bergdorf Goodman earlier in the year.
CEO Marc Metrick pointed to “inventory challenges” stemming from system glitches as a key culprit behind the sales slump, but experts aren’t buying it as the full story.
“The underlying problem remains liquidity: without consistent inventory flow, Saks risks losing share to competitors ahead of the holiday season,” Bhalla added.
These woes are hitting at a vulnerable time.
Saks relies heavily on a vendor-run concession and marketplace model to keep shelves stocked—a precarious setup when trust with suppliers is eroding.
Several key partners have already pulled back, refusing to ship goods or extend credit despite a $600 million bond refinancing deal Saks inked earlier this year.
GlobalData Managing Director Neil Saunders called the sales figures “very soft,” tying them to broader luxury market weakness, store closures, and inventory missteps.
“The business is being buffeted by the weakness in the luxury market as well as being affected by stumbles in inventory,” Saunders noted.
He warned that Saks is “playing a dangerous game” by not mending fences with suppliers faster, especially as the all-important holiday quarter looms.
“The business needs to get supplier relations firmly back on track as it needs the cooperation of suppliers to run its business effectively.”
It Gets Deeper Though
Saks’ struggles echo a broader wave of distress washing over the retail sector, particularly among the mall anchors that once defined suburban shopping.
Founded in 1902 by Horace Saks and Bernard Gimbel, the chain has outlasted many peers through multiple reinventions, from its early days as a Paris-inspired emporium to its post-World War II expansion into regional malls.
But it’s one of a dwindling handful of U.S. retailers over a century old still standing tall.
Macy’s (1858), Brooks Brothers (1818), Levi Strauss & Co. (1853), and Nordstrom (1901) persist, but the graveyard of fallen giants is long:
Montgomery Ward shuttered in 2001 after 128 years, Gimbels closed in 1987, and Sears—once the undisputed king of catalogs and catalogs—now clings to life with just a handful of stores.
This year alone has seen a torrent of high-profile casualties, underscoring how tariffs, inflation, and cautious spending are squeezing even established players.
Fast-fashion staple Forever 21 filed for its second Chapter 11 bankruptcy in March 2025, citing “rising costs and increased competition from abroad,” and announced the closure of all 354 U.S. stores by May 1.
Joann Fabrics, the go-to for crafters, sought protection again in January 2025—less than a year after its prior filing—and plans to shutter 500 of its 800 locations by year’s end, blaming slowing sales and a shrinking customer base.
Party City, the party supply behemoth, went under for the second time in December 2024, opting to liquidate everything just before the holidays.
And Big Lots, the discount home goods chain, entered Chapter 11 in September 2024 amid high costs and slumping sales, with ongoing store closures rippling through strip malls nationwide.
Experts Weigh in On What’s Next for the Retail Industry
The numbers tell a chilling tale. Retail Dive tracked nearly 20 major bankruptcies in 2024, and 2025 is on pace to match or exceed that, fueled by everything from post-pandemic debt loads to Donald Trump’s proposed tariffs on imports.
Moody’s Ratings Vice President Raya Sokolyanska predicts a dip in overall defaults thanks to improved capital access for survivors, but warns that “there could be a risk of greater defaults next year” in discretionary categories like apparel and home goods.
S&P Global’s Bea Chiem agrees, noting that “economic pressures and stretched consumers are creating an environment where discretionary spending remains low.”
Over 15,000 U.S. stores are projected to close this year, per Coresight Research—more than double 2024’s tally—leaving mall operators scrambling as anchor vacancies mount.
For luxury players like Saks, the pain is acute. The sector’s post-COVID rebound has fizzled amid softening demand for $5,000 handbags when grocery bills are climbing.
Hudson’s Bay Co., the 355-year-old Canadian department store operator (parent to Saks Off 5th), filed for creditor protection in March 2025, citing “economic headwinds, shifting post-pandemic shopping patterns, and trade tensions with the U.S.”
Claire’s, the mall-based accessories chain, re-entered bankruptcy in August 2025 for the second time in seven years, buckling under competition from cheap online upstarts like Shein and Temu.
Even JCPenney, another mall staple, is closing eight stores by mid-2025 as it fights to stay relevant.
Here’s What Retailers Are Doing to Adapt
Yet amid the carnage, glimmers of adaptation emerge. Some malls are pivoting to mixed-use spaces, luring in experiential tenants like gyms and entertainment venues to draw foot traffic.
Small businesses, priced out of prime spots for years, are snapping up vacated anchor slots at bargain rates—local boutiques and pop-ups filling the voids left by Forever 21 and Joann.
Placer.ai data shows mall visits holding steady year-over-year in 2025, with indoor centers up 0.08% in August, defying narratives of total collapse.
“Visits to indoor malls and open-air shopping centers held relatively stable in February 2025, despite the sharp drop in consumer confidence,” the firm reported, adding that malls outperformed broader retail averages.
Saks hasn’t issued a formal going-concern warning or confirmed bankruptcy plans, leaving room for a turnaround—perhaps through deeper cost cuts or a strategic sale.
But as Bhalla put it, the company’s “reliance on vendor-run concession and marketplace models is currently what’s keeping the business afloat, underscoring how fragile its balance sheet and supplier trust have become.”
In an industry where survival demands constant reinvention, Saks’ next chapter could determine whether it’s destined for the history books alongside Ward and Gimbels, or joins the ranks of resilient survivors like Macy’s.
For now, the luxury aisles feel a little emptier, and the stakes couldn’t be higher.
Also Read: A Massive Convenience Store Now Closes 500 Stores
