Latest news with #WorldRetailCongress
Yahoo
4 days ago
- 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
Fashion United
26-05-2025
- Business
- Fashion United
World Retail Congress: Experts discuss the reality of AI in retail
London - Prior to the event, it was already clear that the theme of AI would be unavoidable at the World Retail Congress in London. Although it is still a hot topic, the hype and initial panic have given way to reflection and well-considered steps. There were certainly advocates and fans of AI. Scott Price, chief executive officer of DFI Retail Group, stated: 'If you don't aggressively pursue AI, then you will lose. Your proposition simply won't be as personalised as other companies',' during a panel about the growth engines of retail. The use of AI with the help of data makes it possible to further personalise the customer experience. More cautious and sometimes even critical voices were also heard. Georgina SmallWood, chief product, data and technology officer of card service Moonpig, described what is possible with the help of AI. 'We can now make real-time recommendations for, for example, a gift with your card based on what they see you write in the card.' She gave the example of someone sending a card to their father with a reference to a fishing trip. This person then receives recommendations for a fly fishing workshop. 'We have to be careful with its use. We've all opened our phones, seen an advert and thought: Is my phone listening? We don't want to slap you in the face with the fact that we use AI.' Level-headed view of ai according to retail experts at world retail congress Another critical voice came from Elsa Pedro do Souto, global senior manager insights and analytics at Mars. 'We also need to think about the sustainability of AI and the energy it costs. If we can map a process, that means we can automate it. But should we want to?' In addition, there were also some disclaimers, for example from Catherine Brien, partner and managing director of consultancy AlixPartners. 'AI isn't a strategy, it's a tool you can use with a strategy.' AI is also dependent on the data you can feed it. If you don't have good or enough data, AI won't be able to help either. This also fits with what Ken Pilot of Pilot Ventures said during one of the panel talks. He is enthusiastic about AI and the possibilities in the design process, but he is also clear that people are still needed. 'We're replacing the bicycle with a car, but the designer still needs to be the one driving.' The metaphor refers to the fact that AI can create countless options for, for example, a white T-shirt, but a designer still has to safeguard the values and style of the brand they work for in that design. The arrival of AI has certainly turned the business world upside down, and the retail and fashion industry is no exception. However, every major change takes time to be fully embraced and implemented. 'When electricity was introduced, it took 50 years to reorganise the production chains,' Brien warned. This article was translated to English using an AI tool. FashionUnited uses AI language tools to speed up translating (news) articles and proofread the translations to improve the end result. This saves our human journalists time they can spend doing research and writing original articles. Articles translated with the help of AI are checked and edited by a human desk editor prior to going online. If you have questions or comments about this process email us at info@
Fashion Network
20-05-2025
- Business
- Fashion Network
World Retail Congress: Saks Global/Authentic say JV means "luxury on Amazon" will become very natural
The Saks Global and Authentic Brands Group partnership has been a big talking point of late so it was good timing that Authentic's CEO Jamie salter and Saks' executive chairman Richard Baker were on stage together on day two of the World Retail Congress in London this week. They said they believe the Authentic Luxury Group JV could boost margins, take control of luxury away from vendors and towards retail and make the most of the brand strength of Saks to drive global partnerships. Authentic is well known as the acquisitive buyer of brands such as Nautica, Volcom, Aéropostale, Lucky Brand, Nine West, Ted Baker, Juicy Couture and many more. But while it had a presence at the higher-end, its 50/50 joint venture link-up with Saks Global last autumn was key. 'We wanted to get into the luxury space but it's all about distribution,' said Salter. 'When we look at brands, what is really important with us is that they can make the right margin. If you look at the business model today, margin is everything. Getting together with Saks was critical for us. If you are not making low-to-high-60s in the maintained margin it's very difficult.' Baker also commented on the rationale for the partnership, saying that in premium and luxury, there were too many vendors, too much discounting, and not enough margin. "We had to do it, or there would be no industry left in the United States.' With more than $9 billion in GMV, control of over 60% of the US luxury market, and the backing of Amazon, Salter and Baker believe they're creating a next-gen model where retail, data, licensing and media converge. The JV has bold ambitions and Salter said 'the model truly works. But we're not just in retail, we're also in hospitality business, we'll see Saks branded residences going out, which also means people will buy home products for those. We already have projects on the go, and have people in the Middle East and Asia Pacific looking at doing a Saks store, a condo and a hotel'. For now, a key part of the deal is the newly launched Saks store within Amazon — a digital 'walled garden' that preserves brand integrity while giving access to Amazon's mega-sized global audience. Salter said that with Amazon building similar luxury platforms in the UK, Japan, India and the Middle East, within five years 'luxury on Amazon is going to be the most natural thing you ever imagined because they have the most elegant execution and most reach of anyone in the world online'. The link-up between the two also sees them overhauling the Saks business, cutting underperforming brands and prioritising premium partnerships. And they're helped in this process by customer data as they share over 250 million customer profiles across their businesses, offering them up-to-the-minute insight into who's buying what, where, and why. With that weapon to wield, Saks is likely to edit out 500-600 brands out and shift towards 'controlled brands', with a larger margin, aiming at around 20% of sales from these product ranges.
Business of Fashion
20-05-2025
- Business
- Business of Fashion
With Financing Push, Saks Global Looks to Buy Some Time
Saks Global's liquidity crunch has come to a head. Amid mounting concerns about the department store operator's ability to meet an interest payment due next month, a group of bondholders who own a majority of the department store operator's $2.2 billion debt formed a group over the weekend to provide new financing, according to media reports. A potential deal could see the group renegotiate its standing relative to other creditors, such as a higher interest rate or priority in a bankruptcy, in exchange for providing additional liquidity, a form of financing known as a liability management exercise. The group hired Lazard Inc. and Paul Weiss Rifkind Wharton & Garrison as advisers on the potential new financing, Bloomberg reported Sunday. Along with another loan, Saks Global could secure over $500 million in total liquidity, according to Debtwire global head of credit research Tim Hynes. That should be enough for the company to cover the June interest payment and pay vendors through the holiday season. What the financing won't do is address Saks' increasingly precarious positioning in the fashion marketplace. The company's relationship with many brands has soured since its acquisition of rival Neiman Marcus, which closed in December. After months of complaints about late or missing payments for merchandise, Saks announced in February it would make vendors whole by mid-2026, and pay for new merchandise within 90 days. Unpaid supplier invoices reached $1.3 billion as of last August, according to Debtwire. The vendor repayment plan was too little, too late for some brands, which have scaled back on the amount of inventory they send Saks and Neiman Marcus. Others, including some of the biggest European luxury labels, have pulled out of Saks' stores entirely in recent years, part of a wider trend that has seen high-end brands prioritise their own sales channels. Saks' sales have slowed and its cash position has worsened. According to documents obtained by Debtwire, the retailer generated $7.3 billion in sales in the 12 months ending Feb. 3, down 17 percent year on year. In that same period, earnings before interest, taxes, depreciation and amortisation fell 30 percent. Saks' bond, which was issued in December, traded at 48 cents on the dollar on Monday, and its value has fallen sharply in recent weeks as concerns about the company's financial health have escalated. 'This is the company's final gasp for air,' said distressed assets expert and ProChain Capital president David Tawil, of the weekend negotiations with creditors. Saks Global executives have projected strength publicly even as they negotiate emergency financing behind the scenes. At the World Retail Congress in London last week, executive chairman Richard Baker said the company now controls 60 percent of luxury distribution in the US. He said the Neiman Marcus acquisition will save the combined company over $600 million a year as it lays off staff, closes stores and cuts other costs. The problem, however, as reflected in Saks' plummeting bond value, is that investors are sceptical of its ability to pay down debts. Credit rating agency S&P Global placed Saks Global on negative credit watch, a step before downgrading its current CCC+ rating. 'Saks Global is significantly ahead on savings,' the company told BoF in a statement Monday. What's more, Saks is facing a vendor exodus as it continues to struggle with payment for orders, which will further strain both sales and cash flow. Saks' first round of payments on past-due balances will begin in July. But the company appears to be wavering on its commitment to pay for new merchandise within 90 days. While some brands told The Business of Fashion they have received prompt payment, one New York label that shipped merchandise to Neiman Marcus in February said it was told by the retailer last week that it would be paid within 120 days, rather than 90. The falling bond price and refinancing negotiations are also shaking vendors' confidence. Another American label, reacting to the news about Saks' liquidity issues, has proactively cancelled its orders for summer and fall. At the World Retail Conference, Baker said Saks plans to 'edit out' 500 to 600 brands from its stores' selection. He added the priority now is to focus on private labels as well as brands in which it has a controlled interest via its partnership with Authentic Brands Group, which owns the intellectual property of Hervé Léger, Brooks Brothers, Nautica and more. The idea is that with fewer but stronger brand partnerships, Saks Global would also have a stronger grip on markdowns, which have plagued American luxury retail in recent years. The company also recently opened a storefront on Amazon, though it sells only a fraction of its brands there. 'Now with our new structure, we're able to delay promotions, which is going to give our brand partners the chance to have more full price selling in their own stores,' said Baker. 'If we do this right, less inventory, less vendors, more margin and less promotion is going to make the entire industry in the United States healthier.' Baker and Salter also outlined their ambitions in building real estate developments around the world, combining the Saks name recognition with luxury hospitality. Salter said there are six or seven projects already in the pipeline, with opportunities in the Middle East and Asia Pacific. It will take time to boost sales and generate enough cash to be a self-sustaining business again. That's why securing additional capital from the bondholder majority group and the prospective loan is so important, Hynes said. He said Saks is likely to secure new financing because it still has assets to put up as collateral, including its intellectual property and its Fifth Avenue flagship, which a 2024 appraisal valued at $3.6 billion. Even if those plans fall through, Saks may be too big and well known to fail. 'If the company doesn't get the additional financing, then they wind up filing for bankruptcy,' Hynes added. 'But the company will still be around. It'll reorganise. Saks won't just disappear.'
Fashion Network
19-05-2025
- Business
- Fashion Network
World Retail Congress: the power of community and loyalty for big names and small
Several key sessions at the World Retail Congress this week focused on the connected subjects of community and loyalty and speakers from global megastar retailers as well as relatively small businesses had a similar message: nurture your customers and those who inspire you. One of the most crowded sessions included Selfridges COO Leonie Foster and Jennifer Woo, chair and CEO of Lane Crawford Joyce Group. Foster highlighted how the Selfridges Unlocked loyalty scheme taps into the retailer's impressive history (its founder had given VIP customers a key to the store) and also encourages customer interaction as it rewards dwell time and involvement in experiences as well as just sales. 'From the start we've regarded ourselves as more than just a shop,' she said. 'Experience is very much a part of what we do for our customers. We're a social destination. We have an enormous programme for our customers throughout the year. 'We resisted the more traditional format of loyalty schemes. The time element is about collecting keys, whether you visit a restaurant, or you use the skate bowl, you go to the cinema, or visit an event. And it's entirely possible to progress the whole way to being a VSP, a very Selfridges person, without spending any money at all.' Jennifer Woo explained Lane Crawford's approach: 'We design our stores to be very intimate with a smaller format deliberately because we are a relationship business, not a transaction business. We are an own-bought business so we don't have concessions and we are able to control the whole process of the products that we sell to our customers from the beginning to the end. We can curate experiences and the store environment for the customer. We want our customers to feel like they have their own personal fashion and lifestyle assistant.' And the approach is to encourage staff to develop strong customer relationships with its 30,000 top customers. 'Don't get involved' certainly isn't its mantra. For instance, Woo cited a staff member who on her own initiative arranged to take two big trucks from across its categories around to a time-stressed customer's home and he bought the lot — apart from two items (an ashtray as he doesn't smoke and whisky glasses as he doesn't drink). Meanwhile, a panel discussion with Indian beauty retailer Nykaa 's co-founder Adwaita Nayar, plus Eshita Kabra who's founder of peer-to-peer rental platform By Rotation, and Laura Youngston who founded female-focused football boots brand Ida Sports zeroed in on how the nurturing process is important from the early stages of a business onwards. Nykaa is now a major success story with sales of $2 billion and 200 stores, although 90% of its business is done online. Given that fact, it goes to great lengths to connect with its community as much as it did at the start. The company has about 14 million customers and Nayra explained that 'beauty and fashion are very rooted in community… People are always asking each other for recommendations, for advice. We place a lot of focus on community and making these 14 million women feel integrated. And at any given point we're working with 10,000 influencers.' Events are key, with Nayar saying its runs over 100 annually. A flagship example of this is what she called the 'Coachella for beauty', Nykaaland. Launched in 2023, it's a two-day beauty festival where consumers can interact with brands, try products and learn how best to use them. Next, By Rotation's founder stressed how the platform isn't just connecting with its community it is a community. 'We're a social network where you can lend and rent premium lifestyle goods with each other thereby saving the planet, becoming friends, making money and saving money all at the same time,' she said. 'One of our top lenders has made so much money that she's not only paid for her IVF but for her surrogacy so there's so much more that we're doing. Our business is a community, we designed it as a social network. Our renters often become lenders and when we talk about community, we don't just do it from a brand or marketing perspective, for us it's very much just our business model.' And just as Nykaa's community is both about its customers and the influencers and By Rotation's is both its lenders and its renters, Ida Sports has a double-headed community too. There are its customers, but there are the athletes as well with whom it interacts closely. Youngston explained that 'when we started out people said 'aargh, you're going up against Nike!' But she didn't feel at a disadvantage on that front because the business model is to work very closely with the people who will wear the boots, both professionals and amateurs. 'One of the things we do is we ask women what they want when we design — a crazy innovation! We're really listening to players and athletes. We launched our first rugby boot this spring and we really listened to the players about everything they want from colourways to the flexibility of the outsoles. 'I have a programme called 'happy customer. sad customer'. We look at the top five 'happies' and top five 'sads' and we look at what makes someone so loyal that they'll buy 12 pairs of shoes a year and what's making someone so frustrated [that they won't]. They talk about things like wanting a wider shoe — a lot of them are saying that now.' All that feeds quickly into the product development process. Anyone who wants to see Ida sports in action can do as it has taken advantage of another 'community' — the community of emerging retailers nurtured by Westminster City Council in London. Ida Sports will this summer occupy a pop-up on Regent Street. It's that same community project that By Rotation made the most of last year when it moved into a five-storey townhouse in Mayfair rent-free. It was so successful it's been extended to the end of June this year. Let's give the last word to Jennifer Woo who really summed up the importance of community. She acknowledged that today's big obsession — data — is hugely important, but believes there's more to running successful business than that: 'We're in the retail business. Our store is basically the data lake. All you have to do is go to the store and listen to our customers. Even the management team. You have to be present, you can't be behind a screen and just looking at data.'
