The parent company of luxury retailer Saks announced on Thursday that it entered into a restructuring agreement with its capital partners who committed to provide $500 million in financing when the company emerges from bankruptcy.
Saks Global Enterprises filed for Chapter 11 bankruptcy protection in January after it missed a $100 million interest payment in December, as the company was burdened with $3.4 billion in debt following its $2.7 billion acquisition of Neiman Marcus.
The company now expects to exit bankruptcy this summer amid its ongoing restructuring effort.
“Achieving this important milestone underscores the progress we are making on our transformation and reflects our capital partners’ confidence in our go-forward vision, guided by our relentless devotion to the luxury customer,” said Geoffory van Raemdonck, CEO of Saks Global.
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“As we advance the restructuring process and position Saks Global for the future, our focus remains on strengthening our brand partner relationships, and delivering an expertly curated product assortment and personalized service for our luxury customers across Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman,” van Raemdonck added.
Saks Global’s announcement indicated that the company is continuing to work with its financial stakeholders on its reorganization plan and anticipates its filing in the coming weeks.
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Additionally, the retailer’s announcement on Thursday said its inventory has improved after more than 650 of its brand partners resumed shipping, which has helped lift customer engagement.
The company aims to unlock the potential of its three luxury banners and drive sustainable growth.
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Saks Global announced last month that it obtained access to an additional $300 million of its $1.75 billion bankruptcy funding package, which gave it sufficient liquidity to support operations. A group of its bondholders also approved its five-year business plan.
The retailer said in March that it would close 12 Saks Fifth Avenue stores and three Neiman Marcus locations amid the restructuring.
In January, the company announced it would close 62 of its off-price operations, including Saks OFF 5th and the remaining Neiman Marcus Last Call stores.
Reuters contributed to this report.
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