Marc Metrick, the longtime Saks Fifth Avenue executive who oversaw Saks Global’s acquisition of the Neiman Marcus Group, is expected to exit the business, according to multiple sources close to the organization. His anticipated departure would come amid growing speculation that Saks Global, which has struggled to manage its debt since its merger with NMG was finalized late last year, could soon file for Chapter 11 bankruptcy protection. (Metrick declined to comment, but a source close to Saks Global said he is currently still employed by the company.)…
Questions about Metrick’s future began to surface a few weeks ago after he missed a scheduled meeting with Neiman Marcus Group executives in Dallas. Over the past few weeks, multiple vendors have also told me that communications with Metrick, with whom some speak on a weekly basis, had ceased. A note to employees sent out on December 23 regarding news reports about a potential Chapter 11 filing came not from Metrick but from Saks Global chairman Richard Baker. As I recently reported, many in the industry took note when Metrick posted an end-of-year Instagram image of a wheelchair on fire. (A source close to Saks said on Tuesday that Metrick had accidentally reposted it.)
I like Saks, Neiman Marcus, and Bergdorf Goodman.
Back in my hey day, when I’d go to PCAOB SAG meetings wearing Jimmy Choo stiletto suede boots, when I was shopping more, the sale racks at Neiman’s on Michigan Avenue in Chicago were always worth a trip. As the seasons changed you could find high-end designer stuff slashed to the bone. Nowadays I just scroll through my phone and the non-stop emails and text messages I get from all three as a result of buying one dress or top on sale for the rare occasion, looking at what’s new from my favorite designers. Every once and a while I buy deeply discounted Helmut Lang and pay one-click via Apple Pay. Too easy.
The Dig is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.
I’ve had my eye on this dress for a while so they keep sending me emails with ever more enticing offers. But I have decided that it looks too much like something Olivia Nuzzi would wear.
When I wrote last about Saks it was because of some great reporting and access to the actual financials of this now private company via my old friend Bill Cohan at Puck. (Paywall has been lifted.)
Saks had started doing what every company “conserving” cash does: stiff vendors. From Cohan on April 20:
“...on Valentine’s Day. That’s when Marc Metrick, the Saks Global C.E.O., wrote a letter to company vendors informing them that Saks would henceforth pay them after 90 days, rather than the customary 30.
“Stretching payables,” as this tactic is known on Wall Street, is sometimes (but not always) indicative of emerging financial difficulties. Furthermore, Metrick wrote that Saks would not pay its overdue bills to vendors until July, and would pay them off in 12 monthly installments. “It was the letter heard around the world,” Lauren observed. Vendors were outraged.”
From Trump’s Inauguration Day, January 20, to April the bonds’ price had been falling. On “Liberation Day” — the day Trump announced his tariff plan — the bonds plunged. By Good Friday, April 18, the bonds were trading at 72 cents on the dollar.
A week later, April 27, Bill was sounding the alarm.
“A close look at whether Saks Global, several months after acquiringNeiman Marcus Group for $2.7 billion, can make its initial $120 million-ish interest payment to bondholders at the end of June.
At last check, the $2.2 billion publicly traded Saks senior secured bond, due 2029, which pays 11 percent interest, is now trading at 67 cents on the dollar and yielding 22 percent. This is not a good situation for bondholders, who have watched the bond lose a third of its value in the four months since it was issued last December as part of Saks’ $2.7 billion acquisition of Neiman Marcus Group. Nor is it good for the company itself—which, of course, has a roughly $120 million interest payment due on the bonds at the end of June.”
Bill liked the story because, as he wrote on May 4, he “marvel[s] at the ability of Wall Street bankers to sell something that probably should never have been sold in the first place.” He was very concerned that Saks would struggle to make the roughly $120 million interest payment due on the bonds at the end of June.
NEW YORK, June 27, 2025 /PRNewswire/ -- Saks Global Enterprises LLC (the “Company”) today announced that it has secured $600 million in financing commitments from a majority of its existing bondholders. The transaction includes a $400 million First-In, Last-Out (FILO) asset-based credit facility, with $300 million funded today and an additional $100 million to be funded upon completion of a bond exchange. The transaction also includes $200 million in additional commitments subject to the satisfaction of certain conditions. A majority of bondholders have committed to participate in the exchange, which will launch in the near term.
Marc Metrick, CEO of Saks Global Operating Group, said, “Today’s announcement reflects the outcome of productive engagement with our bondholders and their continued confidence in our business and strategic direction. This comprehensive financing package meaningfully enhances our liquidity and strengthens our balance sheet. Coupled with the early realization of synergies and improving inventory position, we are primed to execute on our transformation strategy, invest in key growth initiatives, and reinforce our leadership as the world’s largest multi-brand luxury retailer.”
Bill had used his contacts to get a copy of the prospectus — all 400 plus pages — and shared the “preliminary Offering Memorandum” with me.
Saks is counting on a lot of synergies to get to the goal line. And to do that it has to address, and adjust, the persistently negative GAAP net income for both legacy Saks and Neiman Marcus — NM was the first major department store group to file for bankruptcy protection during the coronavirus pandemic and followed the collapse of Barneys New York in late 2019 — in order to demonstrate sufficient liquidity/free cash flow to meet the debt service requirements.
And, oh boy, is there now a lot of debt. On May 4 Cohan wrote:
“...the combined company would be carrying a ton of debt—the $2.2 billion bond issue; a $1.25 billion commercial mortgage-backed security, secured by the Saks flagship department store on Fifth Avenue; and a $1.8 billion asset-based lending facility, of which the company said $678 million would be drawn at closing. That adds up to more than $4.1 billion of debt at closing, a number which is probably more like $4.8 billion now, given that the company told bondholders on Monday that it still has $400 million of liquidity—implying, to me anyway, that some $1.4 billion of the $1.8 billion ABL line has already been drawn.
Of course, whether a company has too much debt or not is a function of whether it has the EBITDA to service that debt. It’s the ratio between the debt and the EBITDA—rather than the absolute amount of debt—that’s important. In the bond prospectus, Saks effectively promised investors that it would have $7.8 billion in revenue and $707 million in EBITDA for 2025. If Saks could make good on that $707 million EBITDA promise, the ratio of debt to EBITDA would be in the vicinity of 6x—leveraged, yes, but not scarily so. S&P rated the bonds CCC+, junk territory for sure, but not the worst of the worst.
Loyal readers know of my disdain for the increasingly popular, non-GAAP metric of “adjusted EBITDA.” So you can imagine my reaction to seeing Saks take that to the next level in the bond prospectus, with something it was calling “Pro Forma Run-Rate Adjusted EBITDA.” It wasn’t $707 million of EBITDA, it was $707 million of “Pro Forma Run-Rate Adjusted EBITDA.””
Just to set the stage, I must remind readers this is a private debt placement. From the prospectus:
We have not registered the Notes under the Securities Act of 1933, as amended (the “Securities Act”), any other federal securities laws, or the securities laws of any state. The initial purchasers named below are offering the Notes only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A of the Securities Act and outside the United States to persons that are not U.S. persons in offshore transactions in reliance on Regulation S of the Securities Act. Prospective purchasers that are qualified institutional buyers are hereby notified that the seller of the Notes may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. The Notes are not transferable except in accordance with the restrictions described under “Transfer Restrictions.”
The prospectus does a good job of walking down the adjustments to get to “Adjusted EBITDA” and then taking it to the next level with additional assumptions to get to “Pro Forma Run-Rate Adjusted EBITDA.” What’s really neat about this prospectus is, despite the current private status of both Saks and Neiman Marcus, and neither filing anything with the SEC for several years, the prospectus includes recent audited financial statements including notes and auditors’ opinions.
So, I have to stop first and ask: Why use EBITDA as a starting point? EBITDA is really a performance metric, not a liquidity metric. This is not an M&A valuation exercise to get to a purchase price. This is a liquidity exercise, a “going concern” test. Why not use cash flow based on the statement of Cash Flows? Perhaps because that looks pretty dismal as of August 2024.
Saks Global Enterprises, facing limited options ahead of a more than $100 million debt payment due at the end of this month, is considering Chapter 11 bankruptcy as a last resort, according to people with knowledge of the situation.
The company is also weighing additional ways to shore up liquidity, including raising emergency financing or selling assets, the people said, asking not to be identified because they’re not authorized to speak publicly. Separately, some Saks lenders have held confidential talks in recent days to assess the company’s cash needs, according to other people familiar with the matter. Those discussions have focused on a potential debtor-in-possession loan, a form of bankruptcy funding…
Saks faces interest payments of more than $100 million due Dec. 30, according to data compiled by Bloomberg. The $941 million portion of Saks’ second-out notes restructured in August were quoted at about 6 cents on the dollar on Tuesday, down from roughly 36 cents two weeks earlier, according to runs shared with Bloomberg. About $762 million of more senior debt was quoted at around 46 cents.
Puck journalists have continued to report the gossip. Lauren Sherman on December 22:
I’m hearing that Hilldun C.E.O. Gary Wassner is still advising clients to hold off on shipping to Saks Global, given that the group’s accounting department is on break this week. Saks also hired the turnaround and restructuring specialists at Berkeley Research Group “to address its inventory and cash-flow pressures,” according to Bloomberg. (I was able to independently confirm this.) Another Bloomberg report straight-up says that Saks Global is flat-out considering a Chapter 11 bankruptcy restructuring.
For what it’s worth, Saks’ bonds are currently trading “flat,” as if they will not make the $120 million interest payment at the end of the month. I’m also told that Bergdorf Goodman president Tracy Margolies and fashion director Linda Fargo were in Los Angeles a few weeks back with their boss, Marc Metrick, who has stopped engaging with some vendors and employees that he normally talks to at least once a week, sometimes every day. Is there a world in which Bergdorf, the single-door jewel in the Saks Global crown, must expand its capacity as a part of some Hail Mary deal that group chairman RichardBaker may need to cook up to placate vendors? Who knows? But if you’re still shipping to Saks Global, call me! A rep for Saks Global had no comment.
Saks Global has sold the land beneath the Neiman Marcus Beverly Hills flagship to real estate developer and distressed asset specialist BenAshkenazy. The deal came together in just seven days, so after Saks Global C.E.O. MarcMetrick was in Los Angeles earlier this month.
Market sources estimate that Ashkenazy probably paid north of $100 million, but not much more. (Coincidentally, Saks has a similar-size interest payment due at the end of the month.) To be fair, this is the kind of hard decision that most of us expected after the Neiman-Saks merger, although in this case, the store will remain open. (Ashkenazy will now be Saks Global’s landlord, so while this frees up money in the short term, there’s rent to be paid.) “This opportunistic real estate transaction does not impact our day-to-day operations,” a Saks Global rep noted. “We remain committed to serving our loyal Beverly Hills customers.”
A person familiar with the business told me that Saks Global currently has $500 million to $800 million in vendor payments due and is holding $100 million to $300 million in customer refund payments. Asked about those numbers, a rep for Saks Global sent me the following statement: “Together with our key financial stakeholders, we are exploring all potential paths to secure a strong and stable future for Saks Global and advance our transformation while delivering exceptional products, elevated experiences and personalized service to our customers. Importantly, opportunities in the luxury market remain strong, and Saks Global continues to play a distinct and enduring role within it.”
