Saks Global has secured approval from a US bankruptcy court for its $1bn loan after resolving payment disputes with luxury brands and other creditors.
The financing forms part of a wider $1.75bn funding package authorised by US Bankruptcy Judge Alfredo Perez during a hearing in Houston.
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Approval followed agreements between Saks and key luxury suppliers, including Chanel, Dolce & Gabbana and LVMH, along with landlords and Amazon, its partner in an online retail platform.
According to the Reuters report, several vendors had opposed the loan, arguing that lenders might assert claims over high-end merchandise delivered to Saks on a consignment basis before its Chapter 11 filing.
In response, Saks and its lenders confirmed before the hearing that products supplied on concession or consignment terms would remain the property of the brands, addressing objections from labels operating in-store boutiques under such arrangements.
The retailer also reached settlements with certain landlords over outstanding rent for January, the month it sought bankruptcy protection.
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By GlobalDataSaks filed for Chapter 11 on 13 January, carrying $3.4bn in liabilities, after cash-flow pressures tied to its merger with Neiman Marcus disrupted stock replenishment.
Company filings indicate the new funding is intended to stabilise supplier relationships and give Saks time to restructure its debt.
The package will also refinance existing borrowings and expand its asset-based lending facility.
According to the reports, Ben Butterfield, counsel to a court-appointed committee representing Saks’ junior creditors, told the court that nearly $600m of the facility will be used to pay suppliers for goods delivered before the bankruptcy filing.
The reports added that $330m is expected to be distributed within two weeks.
Court filings cited in the report indicate that the retailer owes $136m to Chanel, $60m to Kering and $26m to LVMH.
The financing arrangement also includes commitments from lenders to provide additional support once Saks exits Chapter 11 proceedings.
As part of its restructuring, Saks Global last month said it plans to shut most of its off-price outlets while operating under Chapter 11, focusing instead on luxury and full-price retail across its brands.
