The owner of Saks Fifth Avenue is seeking bankruptcy protection, buffeted by rising competition and the massive debt it took on to buy its rival in the luxury sector, Neiman Marcus, just over a year ago.

Saks Global has secured roughly $1.75 billion in financing, the New York company said as filed for Chapter 11 bankruptcy Wednesday in the Southern District of Texas.

The private company said that stores will remain open as it restructures company debt, meaning that it will honor the programs it has for customers. Suppliers and employees will be paid, Saks said.

“This is a defining moment for Saks Global, and the path ahead presents a meaningful opportunity to strengthen the foundation of our business and position it for the future,” said Geoffroy van Raemdonck, who took over for CEO and Executive Chairman Richard Baker this week. Baker had assumed control after the company’s CEO Marc Metrick, stepped down earlier this month.

When Saks said that it would buy Neiman Marcus for $2.65 billion in the summer of 2024, the goal was to create a powerhouse in a luxury sector that had grown more fragmented. Online sellers were siphoning customers and big name brands had begun to sell goods from their own stores.

But the tie-up with Nieman Marcus only worsened Saks’ debt situation as luxury sales weakened.

Global sales of luxury goods are expected to contract for the second straight year in 2026 as consumers anxious about the global economy pare back their spending, according to a study by Bain & Co. consultancy released in November.

Hudson’s Bay, Canada’s oldest company, began liquidating all but six of its stores in March 2025.

The upscale department store landscape has volatile in recent years.

Neiman Marcus entered bankruptcy protection for about four months in 2020 as the coronavirus pandemic spread. The privately held department store chain was forced to close its stores for several months during the pandemic like other competitors such as Lord & Taylor.

Lord & Taylor sought bankruptcy protection in August of that year, then said it would close all of its stores and operate as an online retailer only.

The century-old department store Nordstrom agreed to be taken private by Nordstrom family members and a Mexican retail group in a $6.25 billion deal last year.

Sales at the long-suffering Macy’s have begun to improve under new CEO Tony Spring, who has shuttered unprofitable stores and improved service. He’s also trying to attract the same luxury shoppers who power sales at Bloomingdale’s and upscale beauty retailer Bluemercury, which are both owned by Macy’s.

There is concern among vendors about Saks and how things will move forward.

“They’re very nervous, very concerned, very worried about spring deliveries for merchandise that they’ve already produced,” said Gary Wassner, CEO of Hilldun Corp., which ensures suppliers get paid for products shipped to retailers. “They weren’t able to complete deliveries on what they had produced for the fourth quarter of (20)25, so they’re sitting with that inventory.”

Wassner said Saks Global accounted for 40% to 50% of the business of some of his clients. He said that he told his clients to stop shipping to Saks last month given the uncertainty.

Saks said that it has financing commitments of $1.5 billion from some of its creditors and another $240 million in “incremental liquidity” from its lenders.