The list of unsecured creditors reads like a Who’s Who of global fashion.
Top of the list, Chanel, with a $136M tab. That is the surprise of the case. Chanel normally operates as a concession in department stores, meaning it manages its own stock and sales, which ought to protect it from unpaid bills. So how did $136M end up among the claims? An industry source told WWD that Chanel was still using Saks’s point-of-sale system, which may have left some of the payments stuck in the pipes. There are also the fragrances, make-up and skincare, which aren’t sold as concessions and were probably delivered wholesale.
Behind Chanel, the biggest names in global luxury: Kering (Gucci, Balenciaga, Saint Laurent), Richemont (Cartier, Van Cleef & Arpels), LVMH. Even PwC, the audit firm, is waiting on $30M of consulting fees. And Meta and Google are among the creditors for unpaid digital advertising.
The total owed to the 30 largest unsecured creditors: $713M.44 The full list is an inventory of global luxury caught in the fall of a single retailer.
The big luxury houses, despite the colossal sums they are owed, are sturdy enough to take the hit. Chanel isn’t going to close because Saks owes it $136M.
For the small brands, it’s another story.
Jovani Fashion, an evening-dress maker, took Saks to court over $295K of unpaid invoices. Not much next to Chanel’s millions, but for a small business it can be fatal.
Glenn McMahon, a partner at MAC Advisory and Consulting, explains the ruthless mechanics of Chapter 1145:
They will pay 50% upfront to get Chanel back, he says. But they won’t pay 50% upfront to get a small brand back.
The big ones will get paid. The small ones, less certain.
The same logic applies to employees. In Canada, the monitor’s report reveals a KERP (Key Employee Retention Program): C$2.46M set aside to keep 106 key employees on board during the liquidation. Out of 9,364 employees, 106 are deemed indispensable. The rest are collateral. And anyone who talks about the programme to anyone other than their spouse or their lawyer loses their bonus.
In the United States, the numbers are dizzying. The defined-benefit pension plans represent $465M of obligations, for 8,158 beneficiaries: 1,297 current employees, 3,575 former employees with vested rights, and 3,286 retirees drawing their pensions. Every month, Saks pays out $5.8M to retirees. A reminder that behind the billions of debt and the financial manoeuvring, there are lives.
Tucked away in the appendices, a delicious detail: the “Million Dollar Book” programme rewards sales associates who top a million dollars in annual sales. While the company hadn’t paid Chanel in eighteen months, it kept a bonus scheme going for the people selling Chanel bags.
A luxury industry executive told the Financial Times he knew brands that had left Saks altogether, many others that had scaled back to a handful of key doors rather than stay exposed nationwide, and plenty of smaller brands scratching their heads, wondering what to do.
But Saks isn’t an isolated case. It is a symptom.
The sinking of Saks Global isn’t happening in a vacuum. Multi-brand luxury retail has been decaying for years.
First, the market itself. According to Bain & Company, global sales of personal luxury goods have fallen 3% from their 2023 peak, to €358bn in 2025.46 These are the two toughest years for the sector since the 2008 financial crisis.
Mickey Chadha, retail analyst at Moody’s, explains what happened: after Covid, a lot of aspirational luxury shoppers came into the market, flush with their savings and their stimulus cheques. Today, he says, those aspirational shoppers are gone, and only the core customers are left.
Saks’s own data confirms it: the top 3% of customers, the ones who splash out more than $10,000 a year, account for 40% of sales on their own. Luxury has gone back to what it used to be: a market for the very rich, not for a middle class treating itself.
David Schick, of Optimal Advisory, adds another dimension: travel and dining have become more important, he notes, and even within spending on luxury goods, home furnishings have gained ground at the expense of fashion. The rich would rather go on holiday than buy themselves a bag.
Then there is distribution. Matchesfashion, the British online luxury retailer, closed in March 2024. Ssense, its Canadian rival, is bankrupt, and its lenders, led by Bank of Montreal, are pushing for a liquidation rather than a buyout by the founders, reckoning they would recover more money by selling off the assets piece by piece.47 Luisaviaroma, the Italian player, is restructuring. In the UK, Selfridges posted a loss of £102.8M. Harrods saw its profits halved.
In Canada, the Hudson’s Bay bankruptcy filing lists the bodies: a dozen or so retailers have gone under since 2015, from Sears Canada to Target Canada, from Nordstrom Canada to Aldo. A graveyard.
In the United States, department stores’ market share has gone from 14% in 1993 to 2.6% in 2024. From fourteen per cent to less than three. In thirty years, department stores have lost 80% of their weight in the American retail landscape.
The reasons are well known: the rise of e-commerce, luxury brands going vertical and preferring to sell directly to their customers, the erosion of shopping malls, and young consumers falling out of love with the department-store format.
Take the Somerset Collection, a shopping mall near Detroit. Neiman Marcus and Saks Fifth Avenue sit at either end. In between? Prada, Louis Vuitton and Hermès boutiques. The brands are cannibalising their own retailers.
Michael Ward, managing director of Harrods in London, sums up the balance of power: the brands, he says, are supreme in all this. Saks Global had the idea that it would use its weight and size to dictate terms to the brands, but the brands have their own personalities and ways of doing things, and they won’t be brought to heel.
The Saks-Neiman Marcus merger was supposed to be the answer: a giant big enough to stand up to the brands and the digital platforms.
Instead, it created a giant with feet of clay that collapsed in thirteen months.