Richard Baker is the exact opposite of the Midas touch, as several analysts and people who have known him like to put it. His CV speaks for itself:
Mark Cohen, former CEO of Sears Canada and a professor at Columbia, sums it up13:
Baker, in his view, essentially ran Lord & Taylor into the ground: an aggressive real estate player who takes himself for a retailer, who inevitably pulled off a few remarkable deals for his own benefit, but did nothing that benefited the organisations he wrapped himself around.
Cohen puts his finger on the essential point: Baker is not a merchant. He never was. He is a property developer who ended up in retail by accident.
Born on 27 November 1965 in Greenwich, Connecticut, into a family where commercial property runs in the blood. His grandfather bought and developed residential and commercial property. His father, Robert Baker, founded National Realty and Development Corp (NRDC), a company specialising in shopping centres in the north-eastern United States.
As a teenager, Richard spent his weekends trailing his father around shopping centres in New Jersey and Pennsylvania. At Cornell, he studied hotel management, not retail. After graduating, he went to Paris to learn to cook, intending to open restaurants. But his father called him home, and the son joined NRDC and persuaded Walmart to open dozens of stores in the family’s malls.
Baker took his first step into retail in 2006, buying Lord & Taylor from Federated-Macy’s. The group had just merged with the May Company and had no use for this ageing department-store chain. Baker, true to form, publicly boasted that he had stolen Lord & Taylor from Macy’s.14 It is probably true: Terry Lundgren, Macy’s CEO at the time, just wanted to get rid of it.
Two years later, in 2008, Baker gets his hands on the Hudson’s Bay Company. The acquisition owes everything to remarkable timing: a South Carolina industrialist, Jerry Zucker, had bought HBC, but he died suddenly, and his widow sold her shares to Baker.15 And that is how a Connecticut shopping-mall developer became “Governor” of the oldest company in North America, a title dating back to the days when the company was run by British aristocrats appointed by the King.
In reality, the Baker method never changes. Buy for the property, not for the retail. In 2011, he sells the leases of the Zellers stores to Target for C$1.8bn, more than he had paid for the whole of HBC three years earlier. Target, which hadn’t grasped that half of those locations were on the wrong side of the tracks, crashed miserably in Canada and had to close every store in 2015. Baker had already cashed his cheque.
In 2013, Baker pulls off what nobody had dared in a century: he gets his hands on Saks Fifth Avenue.
The deal is announced on 29 July. Price: $2.9bn, including $500M of existing debt. A 30% premium to the share price. Saks management didn’t understand what was happening to them. They hadn’t realised the value of their own property: the Beverly Hills flagship alone was valued at $1.5bn. Baker had.
To finance the deal, he stacks up the layers: $1bn of equity (including $500M from the Ontario Teachers’ Pension Plan), $1.9bn of senior loans, $400M of bonds. From day one, he promises to open seven Saks stores in Canada and 25 outlets. Nobody asks him with what money.
But what Baker really cares about is in the press release. One sentence nobody picks up on: HBC will evaluate strategic alternatives to fully realise the substantial value of the combined real estate portfolio, including, but not limited to, setting up a REIT. A REIT. A listed property vehicle. Before he has even signed, Baker is already thinking about extracting the real estate.
The Fifth Avenue temple Horace Saks had built in 1924, the one that had survived the Great Depression, the wars and one takeover after another, now belongs to a shopping-mall developer from Connecticut.
The following year, he sells the Queen Street flagship in Toronto to Cadillac Fairview. Seven years later, he bundles 42M sq ft of property into a new subsidiary, HBC Properties and Investments. The strategy is clear: retail is just a pretext for piling up real estate.
A joint venture with Simon Property Group, the largest shopping-mall owner in the United States, covers 31 properties. Saks holds 62.4% of it. Each property is ring-fenced in a separate SPV, backed by a CMBS loan16.17 The property is structured to be extracted, protected and monetised. The retail business can sink.
In seventeen years, Baker extracted billions from Canadian real estate to build an American empire. The mall owners? Alienated. The customers? He never found the formula to win them over.
With a record like that, anyone else would have stopped. Baker doubled down.
In July 2024, Baker realises his lifelong dream: merging Saks Fifth Avenue with its historic rival, Neiman Marcus.18
Neiman Marcus is the other temple of American luxury. Founded in Dallas in 1907 by Herbert Marcus, his sister Carrie and his brother-in-law Al Neiman. Family legend has it they hesitated between opening a store and investing in a new fizzy drink called Coca-Cola. They chose the store. First customers: Texas cotton heirs, then the oil barons. Stanley Marcus, the son, turned it into a global institution: he was the one who presented the Neiman Marcus Award to Coco Chanel in 1957. The Christmas catalogue, launched in 1939, became a cult object for its extravagant gifts. In May 2020, Neiman was the first major American department store to go bankrupt because of Covid. It came out with less debt, but weakened.
On paper, the merger makes sense. Saks: 39 stores, 95 outlets. Neiman: 36 stores, 2 Bergdorf Goodman, 5 Last Call. Together, they become the number two in American luxury behind Nordstrom, with around 17% of the sector’s visits against 68% for Nordstrom and 15% for Bloomingdale’s. A $2.65bn deal. The structure? Not complicated, but mathematically untenable.
Three blocks of financing:
Various 11% bond lines
Because yes, Amazon puts $475M into equity. But we’ll come back to that a bit later.
To understand what comes next, you need to picture the architecture. The Saks Global structure is a pyramid of companies, Russian dolls stacked one on top of the other. At the bottom of the pyramid, the stores and the inventory, securing the $2.2bn of junk bonds and the $1.5bn Apollo loan. Those creditors are “secured”: if things go wrong, they help themselves to the assets first. At the top of the pyramid, a parent holding company, the “TopCo”, which owns everything else. And on that TopCo sits one last layer of debt: $275M (plus PIK interest, about $310M in total) owed to the former shareholders of Neiman Marcus.19 This isn’t bank debt. It is the deferred price of the acquisition. And it matures on 3 February 2026, twenty days after the bankruptcy filing. Twenty days.
The repayment logic is ruthless: in a bankruptcy, the bondholders and Apollo go first. They recover their money from the stores and the inventory. The TopCo eats the losses. It only gets paid if there is something left after everyone else. It is the most exposed layer of the whole structure.
And that is precisely the layer Baker personally guarantees.
According to a confidential document I have seen, Baker even put his personal fortune on the line. LARBE20, the family holding company he owns with his wife Lisa, guarantees $100M of the TopCo debt. That is rare. Property developers usually shield their wealth behind layers of companies. Baker did the opposite: he latched on to the layer that gets paid last. Under duress, admittedly, or he wouldn’t have got his financing, according to someone close to the deal at the time. But Baker signed. Thirteen months later, the TopCo will be worth nothing.
All in all, Saks Global carries around $3.4bn of debt stacked in layers. Each layer has its own collateral, its own maturities, its own creditors. And when things start to wobble, everyone pulls in their own direction.
The merger closes in December 2024. Saks Global is born. The world’s largest multi-brand luxury retailer, as the press releases proclaim.21 157 stores. 14,610 full-time employees, 2,220 part-time, plus 3,860 temps hired through agencies.22 Saks Fifth Avenue, Neiman Marcus, Bergdorf Goodman, Saks Off 5th. An empire built on $3.4bn of debt.
At the end of January 2025, a month after closing, S&P assigns a CCC+ rating, in highly speculative territory.23 In July, Moody’s cuts it to Caa3 and rubs it in: the capital structure is unsustainable.24
Mickey Chadha, vice-president for corporate finance at Moody’s Ratings, puts it plainly: you had two companies that weren’t doing well, you combined them and added a mountain of debt on top, and the capital structure was unsustainable from the start. He calls it “a recipe for disaster”.25
From then on, debt becomes the group’s central architecture. Everything else (the stores, the brands, the employees) is just collateral.
What the press releases don’t say is that to put this deal together, Baker had to cut Canada loose.
Until December 2024, the Hudson’s Bay Company in Canada and Saks Global in the United States were financed together, as a single credit group. The two companies had shared the same shareholders since being taken private in 2020. When Baker wanted to buy Neiman Marcus, he legally ring-fenced Canada so that the American debt couldn’t fall back on it, while carrying on siphoning value out of it before the split. This isn’t a sacrifice. It is an accounting decoupling.
Three months later, on 7 March 2025, the Hudson’s Bay Company files for creditor protection in Canada under the CCAA (Canada’s equivalent of Chapter 1126).
The mechanism is simple, but it comes with details and acronyms, so hold on tight (or skip ahead).
To buy Neiman Marcus, Baker needed $2.7bn of financing. The American lenders demanded that Canada be ring-fenced: no way were Canadian debts going to contaminate the deal. So Baker separated the two entities, but without giving Canada the means to survive on its own. The result: Canada ended up with creditors specialising in companies in trouble, funds whose only goal is to get their money back as fast as possible, even if it means liquidating.
The court filings show how the trap snapped shut. Three transactions. Two on the very day of the American deal. A third two months later.
23 December 2024. While Baker triumphantly announces the Saks-Neiman Marcus merger in New York, Canada signs its own death warrant.
First transaction: an ABL/FILO27 facility of C$240.4M with Bank of America and Restore Capital, secured on inventory, receivables and cash. Restore Capital is not a bank. It is a fund specialising in distressed companies, pre-bankruptcy situations and heavy restructurings. Its presence at the table says it all: HBC Canada is getting survival financing, not growth financing.
Second transaction: a US$64.3M term loan from Pathlight Capital, secured on the leases of the Canadian stores. The loan dates from November 2020. That day, it is restructured. Crucial detail: the American side is released, and only Canada remains on the hook. Pathlight is cut from the same cloth as Restore: a distressed-debt fund. The interest rate is SOFR + 8.50%. And it matures on 1 May 2025. Four months later.
Total: around C$330M of secured debt. The creditors had locked both possible exits: the inventory AND the property. Before the decoupling was even official, HBC Canada was surrounded. The trap had already closed.
28 February 2025. Third transaction: HBC, under duress, agrees to let the lenders change the terms of the loan.
Because this isn’t just a contract amendment. It is a takeover.
First, the lenders cut the credit line from C$240.4M to C$200M. C$40M gone in two months. Then they impose mandatory “weekly advisor calls” with management to discuss liquidity and “strategic transactions”.
Finally, they require a segregated bank account to be opened under the “sole dominion and control” of Bank of America. The deadline for opening that account: 7 March 2025. Exactly the day HBC Canada would file for protection.
That is no coincidence. The lenders knew.
They also set up what one source calls a “cash dominion system”. In plain English: HBC no longer decides anything. Every dollar that comes in goes to the banks. Any asset sale, any monetisation, any insurance payout has to go to the creditors first. And in a move of rare legal brutality, HBC Canada signs a blanket waiver of any claims against its lenders for anything that happened before. The company will never be able to sue them for forcing the liquidation.
From that point on, HBC is no longer a company. It is an asset under the banks’ guardianship.
Better still: the amendment requires Saks Global to keep providing shared services to HBC Canada. Seven days before the Canadian bankruptcy, the creditors therefore knew that Saks Global was still contractually tangled up in Hudson’s Bay’s financial machinery. The legal decoupling hadn’t come with an operational one. It was a cosmetic separation: a transfer of risk in disguise.
Saks Global employees were still providing services to Hudson’s Bay, billed as cost reimbursements. Canada may have been legally ring-fenced. Operationally, it was still plugged in.
Seven days later, HBC Canada asked the court for protection.
Right up to the last moment, Canadian management had tried to restructure around a group of “core” stores. But the DIP financing28 it needed ballooned to more than C$60M, a risk the FILO lenders refused to take. Their ultimatum: liquidate every store, or no financing. Canada wasn’t abandoned. It was executed by its own creditors.
What that means: 80 Hudson’s Bay stores, 3 Saks Fifth Avenue (under licence), 13 Saks OFF 5TH (under licence), and 9,364 employees.
On 14 May 2025, before the Ontario court, a figure emerges for the first time: HBC Canada had been released from $1.36bn of debt on the day of the Saks-Neiman Marcus merger. In plain English, the “decoupling” consisted of releasing the American entities from $1.36bn of cross-guarantees with Canada. But as Justice Osborne notes:
“There is no evidence as to the exact quantum of the consideration paid.”
Nobody can prove what the Americans actually paid to free themselves from those guarantees. The question remains wide open: what did the Canadian entity get in exchange for releasing $1.36bn of debt?
The isolation was total. HBC’s financial adviser, Reflect Advisors, approached 12 potential lenders for DIP financing. All of them said no. Management then asked its main landlords for a gesture: a rent cut, bridge financing, anything. All of them declined to engage in any substantive discussion. Nobody wanted to save Hudson’s Bay.
Fun fact: Reflect Advisors, the financial adviser hired to find DIP financing, was also working for Pathlight Capital, the fund that held $64M of debt on HBC’s leases before being repaid at the time of the merger. The conflict of interest was formally declared and the parties waived it. That’s what they call governance.
The most chilling detail: the people doing the liquidating are the people who are owed money. The liquidation consortium (Hilco, Gordon Brothers, Tiger, GA Capital) is linked to the FILO lenders. A fifth liquidator that was approached declined to submit an independent bid. There was no tender. There was a settling of scores.
The result? Even after selling everything, $100M is missing. The senior creditors won’t be repaid in full. The rest will get nothing.
Chief financial officer Jennifer Bewley admitted it under oath: “Most recently, it has been unable to pay certain critical trade creditors in the ordinary course of business, and absent additional funding, will be unable, within the next several days, to meet its employee payroll obligations.”
Hudson’s Bay could no longer pay its staff.
Management blames Trump’s tariffs. That’s the official alibi. The real cause: Baker used the money from the Canadian operations to build an American retail empire.
What follows isn’t a story. It is a chain reaction:
Baker didn’t abandon Canada to save America. He tried to ring-fence the losses. And he couldn’t even get that right.