Saks Global, the retail entity established almost a year ago following its acquisition of Neiman Marcus Group for $2.7 billion, has encountered a tumultuous inaugural year marked by considerable financial instability. This period of uncertainty has placed the future of Saks Global, along with the numerous fashion brands reliant on its extensive sales network, under intense scrutiny as the industry looks towards 2026.
The severity of the situation became undeniably clear this week when Hilldun Corporation, a crucial financial firm that processes vendor invoices for cash, temporarily halted its approval of shipments to Saks. This drastic measure was taken after Saks failed to meet two consecutive weeks of payment obligations. Consequently, many brands, some of whom had already dispatched their resort collections to Saks prior to Hilldun's intervention, are now questioning the feasibility of delivering their Spring/Summer 2026 products in the upcoming year.
Gary Wassner, CEO of Hilldun, issued a communication to his brand clients to clarify the rationale behind the payment pause, while simultaneously attempting to downplay the broader implications. He stated that Hilldun has historically provided consistent support to Saks, approving orders for many years. Wassner emphasized that the recent pause, though causing concern, was not unprecedented and was a direct consequence of Saks missing two payment cycles, rather than an indicator of a more profound systemic issue.
However, industry analysts interpret these payment delays as concrete evidence of Saks's persistent financial difficulties, which have been a recurring concern throughout the year. Earlier in February, CEO Marc Metrick informed brands of revisions to Saks's payment terms, extending traditional timelines and generating considerable apprehension among designers. By June, as anxieties regarding Saks's financial health grew, Saks Global secured a $350 million financing commitment from SLR Credit Solutions, an attempt to inject much-needed capital into the struggling enterprise.
Throughout the year, Saks has undergone multiple rounds of workforce reductions. Approximately 150 employees were let go in February as part of the merger, followed by an additional 550 layoffs in April, and another 90 in August. High-ranking executives, including merchandising director Yumi Shin and chief commercial officer Emily Essner, also departed the company during this period. Furthermore, reports in September indicated that Saks was exploring the possibility of divesting a stake in Bergdorf Goodman, a move that would signal further strategic shifts amid its financial woes.
Neil Saunders, managing director of Globaldata’s US retail division, observed that Saks is heavily encumbered by substantial debt and experiencing declining sales, creating significant financial strain. Bryce Quillin, co-founder of brand strategy agency It’s A Working Title, echoed these sentiments, noting that the ongoing payment issues send another concerning signal to Saks's partners and customers. Saks Global has refrained from commenting on the matter.
A New York-based designer, who relies heavily on Saks Global for the majority of his orders, reported awaiting a third late payment this year. He explained that these delays significantly disrupt his annual financial planning, leading to severe cash flow problems, especially when facing commitments like fashion shows and factory payments. An Australian ready-to-wear brand is reportedly owed $300,000 for inventory already supplied to Saks, with additional orders of pre-produced items being canceled in recent months, forcing the designer to absorb the unsold stock. Conversely, an LA-based designer recently received her outstanding payments, expressing a more optimistic outlook on recent developments.
Vidur Adlakha, founder and creative director of the ready-to-wear label Là Fuori, which commenced stocking with Neiman Marcus in November 2024, is also awaiting payments amounting to approximately $450,000 for products, including $90,000 worth of goods he has withheld from shipment. Adlakha, as a self-funded designer operating his own manufacturing, highlighted the substantial financial impact these delays have on his business.
While Wassner maintained that pausing shipments is a routine operational procedure, he acknowledged that such actions attract heightened attention when involving a major retailer like Saks. He conceded that the market has been experiencing slow payments for some time. Despite not being privy to Saks's internal discussions, Wassner affirmed that the retailer has consistently maintained transparency with him regarding payment matters.
However, some designers contend that they have not received the same level of payment transparency. In October, designer Jovani initiated a lawsuit against Saks for $295,000 in overdue payments, escalating a simmering issue that has long troubled vendors. Multiple other brands also confirmed to Vogue Business that Saks still owes them substantial amounts. While one designer was informed by a Hilldun employee via email that order approvals were unlikely before the year's end, Wassner expressed confidence that approvals could resume as early as next week. He hopes that credit lines will open up if Saks fulfills its payment obligations, as it has done in the past.
The LA-based designer is refusing new orders until Saks secures credit approval for existing inventory in her warehouse, totaling about $60,000 of pre-spring merchandise. Adlakha also halted shipments in September after months of chasing payments, noting that he held back resort orders to settle past balances. He credited timely payments from other retailers like Revolve and Moda Operandi for enabling his brand to continue operations. The New York brand is preparing to ship its resort order despite outstanding payments, but its plans beyond that remain uncertain, potentially impacting its ability to showcase collections at future markets.
Despite payment concerns, multiple brands at a recent New York sales showroom continued to accept orders from Saks Global retailers, relying on insurance to cover unpaid invoices. Quillin views designers' hesitation regarding 2026 shipments as a significant vote of no confidence. Jessica Ramírez, co-founder of advisory firm The Consumer Collective, underscored the reduced incentive for designers to partner with wholesalers who cannot ensure timely payments, emphasizing the importance of profitability and reliable relationships. Many industry experts acknowledge Saks Global's critical role as a sales channel, and its potential failure would severely impact numerous brands.
To navigate the path to recovery, Saks needs to prioritize timely payments to vendors and other creditors, thereby rebuilding trust and establishing reliable supply chains. Furthermore, disciplined cost management and enhanced cost efficiencies are essential for financial stability. Analysts have also speculated about the possibility of bankruptcy or restructuring in the coming year, underscoring the urgency of these financial reforms.
However, Quillin does not view bankruptcy as an inevitable outcome. He suggests that if liquidity injections and debt restructuring are successful, and vendor payments resume, Saks could gain valuable time to enhance its consumer offerings. Ramírez concurs, emphasizing the critical need to attract customers, which might necessitate a leadership overhaul to strengthen the retailer's market position. The challenge lies in balancing fiscal discipline with necessary investments in product and customer experience to differentiate itself in a competitive market.
Despite the formidable obstacles, Wassner remains optimistic, advocating for a fair opportunity for Saks in 2026. He stresses the importance of a thriving retail sector in the US and believes that the collective interest lies in Saks's success rather than its failure. Wassner calls for a concerted effort from all stakeholders to alleviate the current pressures and ensure a healthy and prosperous future for Saks Fifth Avenue or Saks Global, without taking undue risks.