Amazon’s big bet on Saks Fifth Avenue just collapsed

Tech Giant Threatens Legal Action After Bankruptcy

Amazon poured $475 million into Saks Global just over a year ago.

The investment was supposed to give Amazon a foothold in luxury retail and guarantee at least $900 million in payments over eight years. Instead, Saks filed for Chapter 11 bankruptcy beginning January 13, 2026, and Amazon is now telling a federal judge that every dollar it invested is gone.

The tech company is not going quietly, and what happens next could determine whether Saks survives at all.

Saks Buys Neiman Marcus for $2.7 Billion

In December 2024, Saks Fifth Avenue completed its $2.7 billion acquisition of Neiman Marcus, bringing together two of America’s most famous luxury department stores.

The deal combined Saks Fifth Avenue, Saks Off 5th, Neiman Marcus, and Bergdorf Goodman under the newly formed Saks Global.

To fund the purchase, Saks used $2.2 billion in junk bonds, and investors, including Amazon and Salesforce, contributed equity.

Amazon Invests $475 Million in the Deal

When Saks acquired Neiman Marcus, Amazon invested $475 million into the venture on the grounds that the retailer would start selling its products on Amazon’s website and the tech company would offer technology and logistics expertise.

The investment gave Amazon just over a 23% stake in Saks Global.

For Amazon, it was a chance to finally crack the luxury market after years of failed attempts.

For Saks, it meant cash and access to the world’s largest e-commerce platform.

Saks Launches a Luxury Storefront on Amazon

On April 29, 2025, Saks Fifth Avenue and Amazon launched Saks on Amazon, a new shopping experience featuring luxury merchandise curated by Saks Fifth Avenue.

Initial brands in the storefront included Dolce & Gabbana, Balmain, Etro, Stella McCartney, and Fear of God.

The online storefront featured digital window displays inspired by the iconic windows at the Saks Fifth Avenue flagship in Manhattan.

Both companies promoted the launch with an editorial campaign and a window installation at the New York flagship.

Amazon Was Promised $900 Million

As part of the deal, Saks agreed to pay a referral fee for Saks-branded goods sold on the platform, guaranteeing at least $900 million in payments to Amazon over eight years.

The arrangement was supposed to benefit both sides. Amazon would get a steady revenue stream from luxury sales, while Saks would reach millions of new customers. But the payments depended on Saks staying healthy enough to keep shipping products and generating sales.

Vendors Stop Getting Paid in 2025

A growing number of Saks’s bills fell into the delinquent category of 91 or more days late between July and December 2025, with 16.43% in July, 24.46% in October, 45.33% in November, and 47.84% in December, according to credit reporting firm Creditsafe.

On February 14, 2025, Saks Global CEO Marc Metrick sent suppliers a memo acknowledging an 18-month backlog of unpaid balances and promising payment in monthly installments starting in July. By August, vendors reported no progress.

Brands Pull Products From Shelves

Increasingly, vendors jumped ship or contemplated it as bills remained unpaid.

When Saks missed payments to vendors, some brands stopped shipping new inventory, leaving its store shelves thinly stocked.

The inventory gaps drove customers to competitors like Nordstrom and Bloomingdale’s, which picked up market share throughout 2025.

It became a vicious cycle: fewer products meant fewer sales, which meant even less money to pay vendors.

Three CEOs in Twelve Days

On January 2, 2026, Saks Global announced that Richard Baker had assumed the role of CEO, replacing Marc Metrick, who stepped down after nearly three decades with the company.

But Baker departed just eleven days later as the company prepared for bankruptcy. Geoffroy van Raemdonck was named as the new chief executive officer of Saks Global on January 14, 2026, as part of the retailer’s Chapter 11 filing.

Van Raemdonck had been CEO of Neiman Marcus before the merger and guided that company through its own pandemic-era bankruptcy.

Saks Files for Bankruptcy in Houston

Saks Global filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas beginning January 13, 2026.

The luxury retailer filed with about $3.4 billion in debt after its Neiman Marcus merger led to cash shortages and inventory issues, which worsened a prolonged decline in sales.

The company secured $1.75 billion in financing to keep operating, with $1.5 billion coming from senior secured bondholders and about $240 million from asset-based lenders.

All stores remain open for now.

Amazon Objects to the Rescue Plan

Amazon filed an objection to Saks Global’s bankruptcy financing plan on the grounds it could harm creditors and push the tech company further down the repayment pecking order.

In court papers filed hours after the bankruptcy, Amazon’s attorneys wrote that its equity investment is now “presumptively worthless.”

Amazon argued that Saks’s bankruptcy financing plan harms the company and other creditors because it saddles parts of the Saks corporation with new debt that it previously didn’t have.

Judge Overrules Amazon’s Objection to Initial Financing

After a late-night, 7.5-hour court battle, Saks won access to about $400 million in cash, but must return in the coming weeks to seek final approval of the entire $1.75 billion financing package.

Saks’s chief restructuring officer, Mark Weinstein, told the court that the initial funding is critical to the company’s survival and that all stores remain open. He said the company’s struggles stemmed from cash shortages that hurt inventory, not from a lack of customer demand.

Amazon and other creditors can try again to convince the judge to alter the debt deal.

Amazon Threatens More Drastic Steps

Amazon wrote that it hopes Saks will resolve its concerns, but if it doesn’t, it may seek more drastic remedies, including the appointment of an examiner or a trustee.

An examiner would investigate the company’s finances and management decisions, while a trustee could take control of the bankruptcy process away from current leadership.

Amazon’s complaints could signal a long and contentious bankruptcy process for the luxury company.

Salesforce also became a minority shareholder in the deal but has not publicly announced whether it plans to object.

Dozens of Stores Could Close

In early January, sources reported that Saks was considering shuttering at least 20 Saks Fifth Avenue and Neiman Marcus locations across the U.S.

Industry observers believe as many as 50 Saks Off 5th stores could close, which is more than half the off-price chain’s fleet.

In November 2025, Saks Global had already announced plans to close nine Saks Off 5th locations. The company says it is evaluating its footprint to invest resources where it has the greatest long-term potential.

The Fight Is Just Beginning

Amazon’s $475 million gamble on luxury retail has become a cautionary tale about what happens when a debt-fueled merger goes wrong.

The tech giant is now one of many creditors fighting for whatever Saks has left.

Van Raemdonck is respected by vendors and has many close relationships, but there are a lot of vendors, and he’s not going to be able to satisfy all of them.

Saks says it expects to emerge from bankruptcy as a stronger company later this year.

Amazon is not so sure.

This article was created with AI assistance and human editing.

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