A US court has approved Saks Global’s reorganisation plan, bringing the luxury retailer closer to exiting Chapter 11 bankruptcy within weeks.
The US Bankruptcy Court for the Southern District of Texas signed off on the plan of reorganisation after the “overwhelming majority” of participating creditors voted in favour across the company’s capital structure.
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Once it emerges from bankruptcy, Saks Global expects to cut its total debt by nearly 75% and retain sufficient liquidity to fund day-to-day operations and future investments.
Saks Global CEO Geoffroy van Raemdonck said: “Securing approval of our plan is an incredible achievement for Saks Global, and the broad-based support we have received from our capital partners, brand partners and other key stakeholders reflects confidence in our future.
“With our capital partners’ commitment and the dedication of our talented team, we are on track to emerge as a stronger, more focused company, poised for profitable and sustainable growth.”
The company is targeting $9bn in total gross merchandise value and double-digit adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) by fiscal year 2030, with a strategy centred on full-price selling.
Over the past five months, the company said it has worked to shore up its finances, rebuild ties with brand partners, and refine its store footprint and supply chain.
It has also wound down most of its off-price operations to concentrate on luxury and full-price retail.
The company added that sales at its continuing stores have been improving, driven by higher inventory levels and stronger customer engagement.
The court’s decision follows its approval last month of a disclosure statement linked to Saks Global’s amended reorganisation plan, which allowed the company to proceed with soliciting creditor votes.
Separately, Saks Global has been restructuring its store network.
In January, the retailer announced plans to close most Saks OFF 5TH locations and all remaining Last Call stores after assessing the performance of its off-price operations, shifting its focus towards luxury and full-price retail across its brands.
