Latest news with #EmilyEssner
Yahoo
30-05-2025
- Business
- Yahoo
Saks Secures $350M in Financing to ‘Fortify' Balance Sheet
Updated 8:48 a.m. ET May 30 Saks Global has gained some extra breathing room. More from WWD Lender Pathlight Sues Saks After Clearing the Way for the Neiman's Deal Saks Global's Emily Essner on Navigating Luxury Amid Uncertainty Brands, Retailers Navigate Changes at World Retail Congress The company — which took on a heavy debt load to buy Neiman Marcus in December and has been working to calm bondholders — secured $350 million in financing commitments from SLR Credit Solutions. That included a $300 million FILO facility that was carved out of Saks' $1.8 billion asset backed lending facility, giving the company ready access to those funds. Saks also lined up a $50 million secured term loan for some of its subsidiaries. The SLR financing is expected to be finalized on or before June 30, a date the market has been watching closely as that's when Saks is due to make its first $120 million interest payment on the $2.2 billion in bonds it sold to buy Neiman's. Saks earlier telegraphed that it was working on the FILO facility and was prepared to make the interest payment. Keeping to such commitments will help Saks rebuild a little confidence with debt investors, who traded some of the company's bonds for as little as 34 cents on the dollar this week. 'As we have always planned, Saks Global is implementing measures to further bolster liquidity and fortify our balance sheet as we continue executing on our transformation strategy and investing in our business,' said Marc Metrick, chief executive officer, in a statement. 'With the financings announced today, the company will have approximately $700 million in available liquidity on a pro forma basis,' Metrick said. 'Along with synergy realization and business performance exceeding our plans, we are well positioned to continue delivering for all of our stakeholders, including our brand partners.' Saks' cash reserves started to dwindle in the run-up to the Neiman's deal, causing the retailer to amass a long list of payments owed to vendors. According to a source, the company's past-due payables current amount to $275 million. Saks has promised to start covering those past-due bills with a year of monthly installment payments, starting in July. Michael Gross, CEO of SLR Capital Partners, said: 'We're pleased to support Saks Global and its leadership team as they execute on their strategic plan. This financing reflects our confidence in the company's platform and long-term growth trajectory.' Saks also said that its business continues to see 'improvements in business performance, with inventory receipt flows improving and synergy realization from integration efforts significantly exceeding plan.' Bondholders are set to get a closer look at the company's books on Friday, when Saks will privately share its financial results. A debt analyst told WWD that the news of the FILO will make Saks' conference call with bondholders easier, but wondered how much interest the company had to agree to pay to secure the financing. Best of WWD Harvey Nichols Sees Sales Dip, Losses Widen in Year Marred by Closures Nike Logs $1.3 Billion Profit, But Supply Chain Issues Persist Zegna Shares Start Trading on New York Stock Exchange
Yahoo
30-05-2025
- Business
- Yahoo
Lender Pathlight Sues Saks After Clearing the Way for the Neiman's Deal
Saks Global has fallen out with Pathlight Capital, which helped clear the way for the luxury retailer's $2.7 billion acquisition of Neiman Marcus last year, but has now sued the company, claiming it's still owed $8.8 million in fees. In turn, Saks alleges that Pathlight's 'lack of good faith' led to the Hudson's Bay restructuring. More from WWD Hudson's Bay Signs Lease Deal With Chinese Billionaire Saks Global's Emily Essner on Navigating Luxury Amid Uncertainty Resurrecting Hudson's Bay, in a Limited Way While the money at stake is relatively small, the suit, filed May 21 in New York Supreme Court, comes at a delicate time for Saks, which declined Wednesday to comment on the case. The deal to acquire Neiman's marked the start of Saks' attempt to reset the U.S. luxury retail scene. The combination has spurred on big changes at both Neiman's and Saks, generated millions in costs and led to a luxury storefront on Amazon. But vendors have chafed at past-due bills and new, slower payment terms. Bondholders, meanwhile, have soured on debt the company raised just six months ago, trading some of the $2.2 billion in junk bonds used to fund the Neiman's acquisition down to as low as 38 cents on the dollar. The Pathlight suit, which shines a light on how the retail buyout came together last year, is one more moving part and potential expense. Pathlight has been a partner to Saks for years, extending it and its former parent company, Hudson's Bay Co., a senior secured term loan facility in 2020. The suit said that Hudson's Bay and Saks Global requested that Pathlight 'restructure the outstanding debt of HBC and…Saks Global,' a switch that was 'critical to facilitating the complex purchase-and-spinoff transaction' with Neiman's. In return for amending the credit facility and giving Hudson's Bay a $65.6 million term loan, Pathlight said Saks agreed to pay it $5 million on Jan. 6. That payment was made. But Pathlight said Saks also agreed to pay $4.4 million in March and another $4.4 million in April if its term loans to Hudson's Bay were not repaid. 'Pathlight fully performed its obligations,' the suit said. 'But the term loans were not repaid; therefore, Saks Global was required to timely pay the second and final installments but has failed to do so.' The suit includes a March 26 letter from Saks' chief legal officer Andrew Woodworth to Pathlight refusing to pay the remaining $8.8 million and alleging that the lender tripped up Hudson's Bay's efforts to refinance the term loan, which would have gotten the company off the hook for the follow-up payments. 'Pathlight failed to reasonably support opportunities presented by HBC, and such failure and lack of good faith cooperation has been the direct cause for HBC's inability to secure this much-needed refinancing. As a result of these actions and inactions by Pathlight, HBC was forced to initiate restructuring proceedings under the Companies' Creditors Arrangement Act (CCAA) in Canada,' which is akin to bankruptcy. 'Pathlight's ongoing intransigence further frustrated HBC's CCAA proceedings, and, on March 21, 2025, forced HBC to announce a near total liquidation,' Woodworth wrote for Saks. 'Pathlight has not acted in good faith, has frustrated HBC's ability to refinance the specified term loan transactions, and has thereby deprived HBC of the opportunity to obtain much-needed financing. Pathlight cannot and should not benefit from its own actions, which deprived HBC of its ability to finance its operations.' Pathlight's managing director Matt Williams shot back the next day and said 'Pathlight's alleged bad-faith dealings with HBC…have no bearing on Saks Global's obligation to pay the structuring fee.' Now the two are in court and Saks' lawyers have promised to respond to the company by July 22. In Saks world, that's a lifetime away. In the meantime, the retailer owes bondholders a $120 million interest payment on June 30, needs to start paying vendors for new shipments and also has to start making back payments to brands who were owed money for shipments made over the past two years. Best of WWD The Biggest Legal Battles Shaping the Fashion Industry Today PETA Asks Lululemon About Slaughterhouse Practices China's Livestreaming Star Viya Fined $210 Million for Tax Evasion Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
21-05-2025
- Business
- Yahoo
Saks Global Walks a Narrow Path
Where does Saks Global go from here? While fashion's year started off with uncertainty around how Saks would integrate Neiman Marcus and pay off its past due bills, the attention shifted last month to U.S. President Donald Trump's dramatic run up in tariffs. More from WWD Saks Global's Emily Essner on Navigating Luxury Amid Uncertainty Prabal Gurung, Saks Fifth Avenue Cohost Cocktail Party to Celebrate the Designer's New Book Saks Global's 'Tight Liquidity' Has S&P Reconsidering Its Credit Rating The trade war has at least cooled, but the uncertainty at Saks has started to heat back up. The turmoil in February was sparked by Saks' plans to pay vendors more slowly going forward and its yearlong schedule to cover back payments starting in July. This time, concerns are coming from bondholders and driven by questions surrounding the company's ability to make its $120 million interest payment due June 30 on debt accumulated in December to fund the Neiman's deal. Saks is more clearly than ever at a crossroads with the bonds trading for less than 48 cents on the dollar — although it is actively working to strengthen its balance sheet and is generally believed to be ready to cover the interest payment. But the market is looking closely at the company's finances and is not reassured. 'The company is a cash incinerator,' one debt analyst said. 'It had a bad structure in December, it's in a worse situation now. They weren't getting shipments until they started accelerating their core vendors in February. They can make it through, but they don't have much cushion. The synergies [cost cuts from combining Saks and Neiman's] have not been realized, but the cost to achieve them has hit them.' It's a fast moving situation that could change on a dime as Saks works toward a more stable liquidity structure. Last week, Standard & Poor's said it could cut its 'CCC-plus' rating on Saks 'by up to two notches over the next few weeks to several months.' The credit watchdog cited the 'uncertainty of how the company will remedy its current liquidity position' and also said the retailer will likely face 'additional challenges in building seasonal inventory.' Bondholders, industry experts and analysts see as many as four different paths forward for Saks, which at last reckoning was said to have $350 million to $400 million of liquidity. Saks has been talking about carving a $300 million FILO facility out of its $1.8 billion asset-backed loan, but many market observers think the company also cuts a deal with bondholders, gaining enough wiggle room and more liquidity to get through Christmas. If the holiday turns out strong and the business is promising — fingers crossed — Saks could then find a way forward based on those results. The luxury retailer already has a relationship with Jamie Salter's Authentic Brands Group, which could step in with more support for Saks, perhaps in return for a piece of the company's intellectual property or greater access to its customer base across Saks, Neiman's and Bergdorf Goodman. Amazon — which just set up a Saks storefront, tapping into some long-sought designer brands — could ride in to the rescue. One keen fashion observer called this the Hail Mary scenario. And then there's the path that the entire industry is thinking about, but doesn't want to talk about, even if the credit reports and talk of liquidity all suggest it's a possibility — a missed interest payment on the bond next month and a free fall into bankruptcy. The good news is that, at least right now, outside experts don't see anyone benefiting from a bankruptcy, especially as the Neiman's deal is still within the six-month clawback period and could technically be unwound by the courts. And Saks and bondholders are both actively working with experts to help navigate the company's efforts to boost liquidity. Saks declined to comment for this article, but is said to be working with financial advisers at Bank of America and PJT Partners as well as law firms Willkie Farr & Gallagher and Kirkland & Ellis. Bondholders are said to have hired Lazard as financial advisers and the law firm Paul, Weiss. Saks is also said to have the $120 million needed to cover the interest payment and is intending to make the payment as it explores options to bolster its liquidity in a suddenly tariff-laden world and mixed up economy. Gary Wassner, chief executive officer of fashion factor Hilldun Corp., said: 'As far as missing the bond interest payment, they emphatically promised me that it will be made on time. We'll see, but I believe this is their intent. I've also been told that the FILO is on track to close in two weeks or so. We'll see as well.' Most importantly, Wassner said, 'They are paying us weekly and we are still approving orders.' Hilldun is a key partner to Saks, working with more than 140 brands that sell to Saks or Neiman's or both and guaranteeing payment on their shipments. And Tim Hynes, global head of credit research at Debtwire, said a group of investors holding 51 percent of Saks' bonds is working together and is 'considering providing $200 million to $250 million in new financing, contingent on improving its standing in the capital structure.' If the FILO facility also materialized, the company could have more than $500 million to see it through. But there are still plenty of questions that are making the process all the more nail biting. Saks has not given the bondholders any audited financial reports for the past three quarters. 'That's pretty unusual,' the debt analyst said. 'Without that, you kind of assume the worst.' The retailer is looking into selling off some of its real estate to raise money, but bondholders are trying to suss out just how much Saks' real estate portfolio is really worth. It has been pegged at $4.4 billion, but could amount to something less than that if it had to be sold off quickly. Some investors who jumped at the chance to earn 11 percent on Saks bonds also might have jumped too fast and not realized that the debt is not secured by the company's famous Fifth Avenue flagship, but instead has a lien on equity in the company that owns the store, putting the prime real estate just a little further out of reach. Then there are Saks' other obligations — whispers that the company still owes Neiman's former owners some payment for the acquisition, a debt that might have a spot in line before bondholders if something went wrong. And Saks is also said to have promised Amazon $800 million in commissions over five years and would owe the e-commerce giant the difference if it missed that mark, although that seems to be a concern for far in the future given how quickly things are moving at the company. Saks' executive chairman Richard Baker was in London last week at the World Retail Congress, making the rounds with Salter. Baker said the company was, as expected, cutting 500 to 600 players out of its vendor base, which includes 2,660 brands across its banners. 'We had to right size our vendor matrix,' he said, adding that the retailer had too many brands and at terms that weren't appropriate. 'We had to reset our expectations for what vendor relationships would look like,' Baker said. Saks produces an estimated $9 billion in retail sales, including the gross merchandise value of online sales, and is looking to do more with 'controlled brands' that are operated through partnerships. 'If I can bring our mix to 20 percent controlled brands with a larger margin and an ownership position with Salter, that's a tremendous win for us, and a much more conservative and appropriate cash flow,' Baker said at the Congress. And Salter added, 'You take 20 percent of $9 billion, that's $1.8 billion. He's gonna make 25 percent more on that product. That's almost a $400 million change. That's why this relationship is so critical.' That math is just part of the grand luxury reset Saks has in mind — a plan that is now barreling ahead as the company not just puts new payment terms into effect, but also aims to cut millions in costs as Saks and Neiman's are combined. It's a lot of internal turmoil in a time that is loaded with external turmoil. Beyond contending with the trade war, Saks and Neiman's have to hold their ground as Nordstrom starts to remake itself as a private company, as Bloomingdale's grabs what it can and as the big luxury brands continue to expand with their own stores. The conversation might be all about financing Saks right now, but it still has to be a retailer. Best of WWD Harvey Nichols Sees Sales Dip, Losses Widen in Year Marred by Closures Nike Logs $1.3 Billion Profit, But Supply Chain Issues Persist Zegna Shares Start Trading on New York Stock Exchange Sign in to access your portfolio
Business Wire
06-05-2025
- Business
- Business Wire
Saks Global President & Chief Commercial Officer Emily Essner to Speak at WWD Beauty CEO Summit
NEW YORK--(BUSINESS WIRE)-- Saks Global President & Chief Commercial Officer Emily Essner is speaking in a fireside chat at the WWD Beauty CEO Summit. The conversation will focus on, 'Saks Global's Strategy: Beauty's Role in the New Luxury Reset,' with Essner sharing her vision for Saks Global and introducing the luxury beauty strategy for Saks Fifth Avenue and Neiman Marcus. The fireside chat will take place on Thursday, May 8 from 9:20-9:45 a.m. ET at Cipriani South Street in New York. Drawing on her deep experience in luxury retail, Essner will offer insight into Saks Global's strategy to reinvent the luxury shopping experience so that each customer's experience is unmistakably their own. As the largest multi-brand luxury retailer in the world, Saks Global is committed to connecting brands to the full continuum of luxury consumers. Saks Global's luxury retail brands are the ultimate destinations for luxury beauty, representing a meaningful percentage of this market. With an expertly curated assortment of exceptional brands, the luxury retailer is shaping the future of this category and reclaiming luxury beauty. Through this fireside chat, Essner will expand on this approach—sharing strategic insights, compelling proof points and an inspiring vision for what's next. About Saks Global Saks Global is a combination of world-class luxury retailers, including Neiman Marcus, Bergdorf Goodman, Saks Fifth Avenue and Saks OFF 5TH, as well as a portfolio of prime U.S. real estate holdings and investments. Saks Global is deeply committed to helping luxury consumers discover the most sought-after established and emerging brands from around the world. Powered by data-driven technology and centered on the customer, Saks Global is on a mission to redefine the luxury shopping experience through highly personalized service, with greater opportunities for product discovery across all channels.
Fibre2Fashion
30-04-2025
- Business
- Fibre2Fashion
American firm Saks Fifth Avenue launches luxury storefront on Amazon
Saks Fifth Avenue and Amazon Fashion join forces to launch Saks on Amazon, a new shopping experience in Luxury Stores at Amazon featuring a refined selection of luxury merchandise curated by Saks Fifth Avenue. The new multi-brand storefront enables customers to access some of the most sought-after brands in luxury fashion and beauty in Amazon's store. This collaboration seamlessly blends Saks' luxury expertise with the convenience, ease and speed that customers have come to expect from Amazon, creating an inspiring shopping experience that enhances discovery and access to luxury fashion and beauty. 'We're excited to introduce a new shopping experience that gives Amazon customers the opportunity to discover a distinctive luxury assortment selected by the experts at Saks Fifth Avenue,' said Emily Essner, President & Chief Commercial Officer at Saks Global. 'This collaboration underscores Saks Fifth Avenue's reputation as a leader in luxury curation, as well as our commitment to reinventing luxury shopping so that each customer's experience is unmistakably their own. We are delighted to collaborate with an incredible group of forward-thinking brand partners for launch, and we look forward to expanding selection with additional brands as we evolve the experience.' Saks Fifth Avenue and Amazon Fashion have launched 'Saks on Amazon', a curated storefront in Amazon's Luxury Stores. It offers top brands like Balmain, Stella McCartney and La Prairie across fashion and beauty. The experience features digital window displays and a whimsical campaign, combining Saks' luxury expertise with Amazon's ease and speed to enhance discovery and access. "We know that Amazon customers are eager to shop these brands in Luxury Stores,' said Jenny Freshwater, Vice President of Amazon Fashion, Fitness and Creators. "This collaboration with Saks furthers Amazon's commitment to supporting the luxury industry and increasing our assortment for customers, while maintaining an elevated shopping experience that meets the varying tastes of our diverse customer base." The 'Saks on Amazon' Experience Amazon customers will discover a curated selection of Saks' luxury assortment across women's and men's ready-to-wear, beauty, shoes, handbags and accessories. Customers can explore the latest styles from renowned brands, including Dolce&Gabbana, Balmain, Etro, Stella McCartney, Giambattista Valli, Erdem, Fear of God, Jason Wu Collection, Rosetta Getty, Johanna Ortiz, Chantecaille, La Prairie and more – with additional brands set to launch in coming months. The experience includes regularly refreshed product arrays, such as New Arrivals, Women's Weekend Uniform and Men's Elevated Essentials, enabling Amazon customers to discover what's new and trending with ease. Customers can also browse the launch assortment through digital window displays available in the Saks on Amazon experience. Inspired by the iconic windows at the Saks Fifth Avenue New York flagship, these digital displays allow customers to 'window shop' the Saks on Amazon storefront, with the added convenience of instantly adding items to their cart. The 'Saks Arrives on Amazon' Campaign 'Saks Arrives on Amazon,' the editorial campaign created by Saks and directed by Emmy-award winning director Max Siedentopf, underscores the thrill and anticipation of receiving luxury items with ease from Saks on Amazon. Divided into six vignettes, the playful visuals emphasize luxury sensibility and ignite customer imagination with unique, idiosyncratic moments of Saks luxury products arriving at home – from a Balmain B Buzz top-handle handbag pulling up to a front door on top of a miniature vintage car to Stella McCartney Ryder bags descending from the sky hanging from umbrellas. Customers can shop the products featured in the campaign directly in the Saks on Amazon shopping experience. The campaign also comes to life through a window installation at the Saks Fifth Avenue New York flagship. Located on the corner of 50th Street and Fifth Avenue, the window display features a curation of items from the Saks on Amazon assortment set against whimsical backdrops inspired by the campaign. Note: The headline, insights, and image of this press release may have been refined by the Fibre2Fashion staff; the rest of the content remains unchanged. Fibre2Fashion News Desk (RM)
