Saks, its suppliers and debtor-in-possession (DIP) lenders are negotiating whether consigned luxury goods can be treated as collateral under the retailer’s $1.75bn bankruptcy financing.
Vendors have sought assurances that lenders would not assert rights over concession or consignment inventory, or related cash proceeds, sources told Reuters.
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According to the news agency’s report, all sides were hoping to reach an agreement before a 17 February 2026 court deadline to object to the loan, though some issues were unresolved.
The luxury retailer filed for Chapter 11 last month and has said it cannot complete its restructuring without the DIP facility led by Pentwater Capital Management and Bracebridge Capital.
The financing allows Saks to keep stores open and continue paying suppliers while it reorganises billions of dollars of debt.
The dispute underlines competing priorities in the case.
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By GlobalDataDIP lenders typically hold top-priority liens over a debtor’s estate and may later receive equity in the reorganised company.
Saks’ dependence on a small group of exclusive luxury brands, however, gives suppliers unusual leverage, the report added.
Its offering relies on labels including Chanel, Louis Vuitton, Dolce & Gabbana, Christian Louboutin and Gucci.
At issue is merchandise supplied under concession or consignment arrangements, where ownership remains with vendors until sale, despite goods being displayed and sold in Saks stores.
A January interim court order approving part of the DIP loan stated that concession and consignment property would not form part of the lenders’ collateral.
Some brands nonetheless fear the structure could allow claims over such goods in certain circumstances, according to two sources cited in the report.
Suppliers want the court to confirm that concession and consignment stock sits outside Saks’ estate, preserving ownership rather than leaving vendors as unsecured creditors.
Two sources told Reuters that Chanel is Saks’ largest concessionaire with about $136m in claims.
Other brands such as Kiton also have concession exposure while jewellers AJD Platinum and Vivid Blue supply on consignment; AJD reported $8.3m of inventory at Saks.
Retail Insight Network has reached out to Saks Global for comment.
