Amazon Warns of ‘Drastic Steps’ Amid Saks Bankruptcy
Amazon has recently voiced its discontent regarding Saks Global’s bankruptcy financing plan. The company has filed motions urging a federal judge to reject the plan, citing significant financial mismanagement by Saks.
Key Details of the Bankruptcy Case
According to Amazon’s court documents, Saks Global has “burned through hundreds of millions of dollars in less than a year.” This alarming statement comes shortly after Saks filed for Chapter 11 bankruptcy protection.
Financial Background
- Saks Acquisition of Neiman Marcus: In December 2024, Saks acquired Neiman Marcus for $2.7 billion.
- Amazon’s Investment: Amazon invested $475 million in the acquisition, expecting Saks to sell products on its platform.
- Equity Value: Following the bankruptcy filing, Amazon stated that its equity investment is now “presumptively worthless.”
Debt Accumulation
The court filing also revealed that Saks had not only failed to meet its budgets but also accumulated substantial unpaid debts. These debts amount to hundreds of millions owed to various retail partners.
Agreement Details
As part of their collaboration, Saks launched a “Saks at Amazon” storefront. This platform offered a variety of luxury fashion and beauty items. Furthermore, Saks committed to paying referral fees for sales made through Amazon, securing at least $900 million in payments over eight years.
With this situation unfolding, the focus remains on the implications for both Amazon and Saks as they navigate this challenging financial landscape. The future of their partnership hangs in the balance as the court evaluates the bankruptcy financing plan.
