Saks Global has secured an initial $500 million in bankruptcy financing as it continues through Chapter 11 proceedings, company filings show. The funding is part of a larger $1.75 billion financing package arranged to keep stores operating, pay vendors, and support restructuring efforts.

The luxury retail group owner of Saks Fifth Avenue, Neiman Marcus, Bergdorf Goodman and Saks OFF 5TH said the access to this capital will help stabilize its business while it reorganizes debts and operations under court supervision.

Saks Global filed for Chapter 11 bankruptcy protection in January after mounting financial pressure tied to its debt load and declining sales. The company reported that the financing will allow it to continue normal operations, support employee payroll and benefits, and maintain its customer programs throughout the restructuring process.

The luxury retailer’s bankruptcy filing comes after a period of significant debt accumulation, including the purchase of Neiman Marcus in a $2.7 billion deal completed in 2024. That acquisition and other obligations contributed to liquidity issues that ultimately led the company to seek the court-supervised restructuring.

Under the financing plan, an investor group led by bondholders committed to providing Saks Global with capital. The package includes about $1 billion in debtor-in-possession (DIP) financing, which becomes available upon court approval to fund ongoing costs like payroll and vendor payments while the company reorganizes.

In addition to the $1 billion DIP loan, approximately $240 million in incremental liquidity is being supplied by asset-based lenders to help cover immediate operational needs. Once Saks Global successfully emerges from bankruptcy protection which it expects to do later this year the bondholder group has pledged an additional $500 million in financing to support the company’s turnaround and future operations.

The secured financing offer reflects confidence from some investors that Saks Global can continue as an operating business even as it moves through a complex Chapter 11 process. Bankruptcy financing like this typically gives lenders priority over existing debt if the company is unable to successfully restructure.

Saks Global’s executive leadership also shifted as part of the company’s efforts to navigate the restructuring. Former Neiman Marcus CEO Geoffroy van Raemdonck was named chief executive to lead the company through the bankruptcy process, succeeding Richard Baker, who had taken on the role after the departure of previous management. Van Raemdonck’s experience guiding luxury retail through tough financial environments was cited by analysts as a key factor in moving forward with a reorganization plan.

The financing arrangement and operational strategy come as Saks Global grapples with broader challenges facing department stores and high-end retail. Luxury brands increasingly favor direct-to-consumer sales and exclusive boutiques, reducing the role of legacy department stores in their distribution strategies. This shift has compounded pressures on department store chains nationwide, contributing to slower sales and tighter finances.

Luxury goods suppliers who rely on department stores have also felt ripple effects from the industry’s slowdown. In its bankruptcy filings, Saks Global listed thousands of unsecured creditors, including major luxury brands such as Chanel, Gucci owner Kering, and LVMH, which together account for hundreds of millions in unpaid balances. The company estimated there are between 10,000 and 25,000 creditors in total.

Despite these challenges, Saks Global emphasized that the newly unlocked financing will help support continued relationships with brand partners and inventory flow throughout the bankruptcy process. In a press release announcing access to the initial tranche of capital, the company said the funds will “facilitate go-forward payments to brand partners and the acceleration of inventory flow,” underscoring a commitment to maintaining its luxury retail ecosystem even as it restructures.

Saks Global also stressed that its stores and e-commerce channels remain open and operational during bankruptcy, including flagship locations and online platforms. Customers continue to be able to shop merchandise, redeem loyalty benefits, and access services as normal throughout the restructuring period.

Industry analysts say that gaining access to substantial DIP financing is a critical step for any retailer pursuing Chapter 11, as it enables a company to remain solvent while it negotiates with creditors, reorganizes debt, and explores strategic alternatives. Without such financing, a company might struggle to keep doors open or honor obligations to suppliers and employees.

Saks Global’s bankruptcy case also illustrates broader trends in the retail sector. Traditional department stores have faced heightened competition not only from luxury brands’ own boutiques and online stores but also from off-price formats and digital marketplaces that have reshaped consumer shopping habits. The combination of a heavy debt burden with these structural shifts in the market has made it more difficult for legacy department store operators to sustain growth.

As the restructuring process unfolds, Saks Global has indicated that it aims to complete its emergence from Chapter 11 later in 2026, pending approval of its reorganization plan by the bankruptcy court. The additional $500 million in financing available upon emergence is intended to help support the company’s longer-term recovery and position its portfolio of luxury brands for future success.

Observers say that while bankruptcy is often seen as a last resort, successful reorganizations can give longtime retail brands a chance to reset their financial footing and adapt to evolving market conditions. For Saks Global, access to this funding especially the initial $500 million now unlocked provides crucial breathing room as it works toward that goal.