Latest news with #luxuryretail
Yahoo
2 days ago
- Business
- Yahoo
Saks Global Hits ‘Turning Point,' According to CEO Marc Metrick
Marc Metrick sees bright skies ahead for Saks Global. Of course, he would. As chief executive officer of the still-new combination of Saks and Neiman Marcus with plans to 'reset' luxury retailing, he has a big stake in that future. More from WWD Saks Secures $350M in Financing to 'Fortify' Balance Sheet Lender Pathlight Sues Saks After Clearing the Way for the Neiman's Deal Saks Global's Emily Essner on Navigating Luxury Amid Uncertainty But since Saks bought Neiman's in a $2.7 billion deal two days before Christmas, the narrative around the company has been less about reinvention than it has been about finances — from when it will pay vendors and how quickly it can cut costs to the rapid decline in its bond price and the race to shore up its liquidity. Now, with financial results for 2024 in the books and some new financing coming into place, Metrick is hoping to put some of the balance sheet minutia aside and be more of the visionary CEO. 'Today is the turning point,' Metrick told WWD in an exclusive interview on Friday following a conference call with bondholders covering year-end results. 'We cleared the air and we've cleared the path for growth. Saks is on very good footing, well underway on repairing and strengthening our brand partnerships, rebuilding trust with our brands. The balance sheet is now something that people should not worry about. There's $700 million of liquidity.' Just how much brands and bondholders and other investors will worry about the balance sheet now remains to be seen. The story at Saks has changed before, with dreams of a transformed luxury landscape chased by financial strain. But investors seemed to take heart. According to FINRA, Saks' bonds were going for more than 47 cents on the dollar on Friday. That's still low, but up significantly from under 39 cents earlier in the week. And certainly some of the burden has been relieved. Saks has a $120 million bond interest payment due next month, another $120 million payment due in December and promises to make $275 million in back payments to vendors to stack up against that $700 million. Half of the liquidity comes from $350 million in financing Saks secured late Thursday. The package included a $300 million FILO facility that was carved out of Saks' asset backed lending facility as well as a $50 million secured term loan, both from SLR Credit Solutions. 'Saks is in it and we're going to do something great,' Metrick said. 'The most important thing to me is reestablishing the credibility that we have with our partners and [realizing] synergies well ahead of plan.' The company plans to cut $600 million out of its annual cost base over the next five years by trimming down as Neiman's is integrated into Saks. That's $100 million more than initially envisioned. By the end of the year, Saks plans to have cut costs by a run-rate of $285 million. Metrick is out on the highwire, looking to perform one more trick. Already Saks pulled off what many thought was impossible, fulfilling a long-held dream of executive chairman Richard Baker's, the force behind the company. Without enough cash to pay vendors and with sales in decline, Saks managed to raise enough debt to buy the much stronger Neiman's. The company now has total borrowings of $4.3 billion, including $1 billion drawn from an asset-backed lending facility, $2.2 billion in bonds due in 2029 and a $1.3 billion non-recourse mortgage on the Saks Fifth Avenue Manhattan flagship. Now, it's cutting costs and updating its business model so it an afford that debt and fulfill the dream of a new luxury retail landscape. Fortune is said to favor the bold and Metrick and Baker are certainly that. But to work, their plans will have to be backed up by a growing business. Some of Saks' allies are already feeling better. Gary Wassner, CEO of Hilldun Corp., has continued to support Saks as one of the few factors willing to finance shipments of goods to the company. 'I am approving orders with much more sureness,' Wassner said. 'With the cost-cutting measures they're putting into effect, and the synergies between the now-merged entities that are already impacting them positively, they now have more of a runway to achieve the full savings and efficiencies that they initially predicted would greatly improve their cash flow and profitability. 'We should all want Saks Global to succeed,' he said. 'No one benefits if it fails. It dominates the U.S. luxury and designer market. The merged companies got off to a rough start, for sure. And everyone felt the stress, and many suffered from the situation. Now it's up to management to take advantage of their positioning, rebuild confidence in the market, and start making money.' For the year ended Feb. 1, Saks said revenues totaled $3.8 billion. That included about $432 million in sales from Neiman Marcus Group, which was acquired on Dec. 23. The 'credit group' — the company's main business, including Saks Fifth Avenue, Neiman Marcus, Bergdorf Goodman and the Saks Off 5th brick-and-mortar stores, which are all financed collectively — produced sales of $3.5 billion for the year. Incorporating Neiman's business for the whole year, sales fell 10 percent to $7.3 billion. Gross profit margins for the main business stood at 41 percent on a combined basis in 2024, an improvement of 80 basis points that was driven by lower markdowns and more concession sales. While cutting price markdowns is a continual goal for retailers, Saks got there in the wrong way. The company's slow — or non-existent — payments cut off the flow of goods to its stores and website, which according to one source, did not receive $650 million worth of inventory that it otherwise would have last year. Going forward, Saks does not intend to keep leaning into concessions, but plans keep migrating toward a new approach. 'We're looking to reinvent the model,' Metrick said. 'It's not concession. It's not wholesale. What's the new model look like? The brands are excited to do that. Obviously for us, we have to figure out what's the best model for us to have all the data control, the customer experience, all that.' Saks made one key change right away and extended payment terms to vendors to 90 days from 30 days. While that change, coming after years of slow payment from Saks, caused an uproar when it was rolled out in February, it also helped the company play catch-up with its suppliers. The longer terms essentially gave Saks a $600 million boost — $400 million of which went to pay off past-due bills while the other $200 million was included with working capital, a source said. Now the company is said to owe $275 million to vendors from past shipments and plans to start paying that down over a year of monthly installments, starting in July. (There have been reports that Saks owed $1.3 billion in back bills last summer, but a source said that was the company's total payables at the time). Saks said that its inventory flow was now 'steadily improving' and that that led to a pick-up in sales later in the first quarter. The trend is expected to 'normalize through summer and into its fall inventory build.' Selling, general and administrative expenses came in at 42 percent of revenues last year, an increase of about 30 basis points, primarily due to the legacy Saks operations. All that boiled down to adjusted losses before interest, taxes and depreciation of $102 million, which included $42 million in earnings from Neiman's during the last six weeks of the year. On a combined basis, adjusted EBITDA totaled $161 million for the year, with Neiman's profits covering up for Saks' business' deficit. Saks snagged Neiman's. Now, Metrick has to make the whole thing work. 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
Bloomberg
3 days ago
- Business
- Bloomberg
Saks Reveals $100 Million Loss in No-Questions Creditor Call
By , Reshmi Basu, and Irene Garcia Perez Save Saks Global Enterprises told creditors it had an adjusted loss of more than $100 million last fiscal year, one day after it announced a $350 million financial lifeline ahead of a looming coupon payment. The luxury retailer has $275 million in overdue payments to suppliers, management told bondholders in a Friday call where it also shared figures from the 12-month period ended Feb. 1, according to people with knowledge of the call's contents. Combined with results from recently acquired Neiman Marcus, the company recorded $161 million in adjusted earnings last year, Saks reported.
BBC News
6 days ago
- Business
- BBC News
Scotch Corner Designer Village delays leave nearby residents frustrated
Developers behind a luxury retail park say they have signed leases for more than two thirds of units, despite nearby residents claiming there has been no construction work on the site for more than a Corner Designer Village in North Yorkshire, which gained planning permission in 2016, said it was working towards a March 2026 opening 2020, developers said they were expecting it to launch in autumn 2023 but this was moved back to September councillor Angus Thompson said he had regularly contacted the developer for an update and had been told work was due to restart on the site at the end of June. He said: "There has to be an upgrade to Scotch Corner roundabout before the development can work."The roundabout doesn't cope with the volume of traffic at busy times now and it's going to be a 30% or 40% increase in traffic."Resident Neale Brewster, who lives in Richmond, said he drove past the site every day and had not seen any work taking place for more than 18 months."The development started prior to Covid and over the last couple of years they have not done a lot," he said."Nobody has been anywhere near the site, it's just been one person on site most days."Everything seems to have ground to a halt."Mr Brewster said he had worked in the construction industry for 35 years and would be amazed if the development was completed by March 2026."It's an eyesore. It's frustrating because it could be a good source of local jobs," he added. Marketing director of the development Patrick Hanson-Lowe said they had filled 72% of leases and were keen to "bring premium retailers" to the site."We have the groundwork done to ground level and above ground it is about half built. But we have paused to focus on retail," he added."The internal walls on a development like this are moveable, and a retailer may come in and ask for it be different, so we have to be careful we don't overly build it."Thompson said he believed a decision on the National Highways A66 dual carriageway upgrade would dictate progress.A spokesperson for Scotch Corner Designer Village said it would have "absolutely no impact whatsoever" and the company had begun the lease process, and applied for planning permissions "long before the A66 upgrade project began".North Yorkshire Council was contacted for comment. Listen to highlights from North Yorkshire on BBC Sounds, catch up with the latest episode of Look North.
Zawya
23-05-2025
- Business
- Zawya
UAE-based Chalhoub Group eyes investment opportunities in Egypt
Arab Finance: Chalhoub Group, a Dubai-based luxury retailer and distributor, is exploring potential investments and opportunities in the Egyptian market, Executive Chairman Patrick Chalhoub announced. In his meeting with Minister of Investment and Foreign Trade Hassan El-Khatib, Chalhoub rolled out future plans to scale up its business, particularly in the fashion and beauty industry, by launching new brands and expanding its current partnerships. On his part, El-Khatib affirmed the ministry's readiness to provide all forms of support to the company's investments and expansion plans in the Egypt over the coming period. © 2020-2023 Arab Finance For Information Technology. All Rights Reserved. Provided by SyndiGate Media Inc. (
Yahoo
22-05-2025
- Business
- Yahoo
Ralph Lauren Sees Sales Slowdown Solely in North America
Ralph Lauren on Thursday projected fiscal 2026 revenue growth overall but a sales decline in North America. The retailer is taking "a more cautious view on the second half of the year based on a number of macro indicators," CFO Justin Picicci said on the earnings call. Ralph Lauren's fiscal 2025 fourth-quarter results beat Wall Street and Asia will be repping the latest Ralph Lauren (RL) looks in the year ahead, but the luxury retailer's new releases may not sell as well in North America, executives said. Ralph Lauren released better-than-expected fourth-quarter results Thursday and said it expects the momentum to carry over into its new fiscal year—outside the U.S. and Canada. Flagging consumer sentiment and concerns that tariffs will spur inflation may weigh on Ralph Lauren's performance in North America, executives said on the earnings call. "When it comes to our core consumer, which, as you know, are more elevated consumers, they have remained resilient," CEO Patrice Louvet said, according to a transcript made available by AlphaSense. However, Louvet added that "we're in touch with reality, and like all of you, we continue to closely monitor the macros." The retailer said it plans to raise prices this fall in North America and Asia and is assessing additional increases to mitigate the impact of tariffs, executives said. Ralph Lauren sees fiscal 2026 revenue increasing "approximately low-single digits to last year on a constant currency basis, with growth weighted to the first half of the fiscal year." However, CFO Justin Picicci said on the call that the company expects revenue in North America "overall down low- to mid-single digits." Picicci said growth is projected to be "led by Asia at that sort of high-single-digit mark, followed by Europe in that mid-single-digit growth range." "We believe it is prudent to take a more cautious view on the second half of the year based on a number of macro indicators," Picicci said, before listing "the impact of tariffs, weakening consumer confidence in the U.S. and increased risk of a broader consumer pullback." Ralph Lauren's Q4 results topped expectations. Ralph Lauren reported adjusted earnings per share of $2.27 on revenue that rose 8% year-over-year to $1.70 billion, while analysts polled by Visible Alpha anticipated $1.99 and $1.65 billion, respectively. Shares, which rose about 1.3% in recent trading, are up 20% this year. Read the original article on Investopedia Sign in to access your portfolio
