Saks is facing criticism as several vendors allege the company has failed to pay long-overdue invoices despite the promised deadline having already passed.
Renowned as a major player in luxury retail, Saks operates high-end department stores under the Saks Fifth Avenue and Saks Off 5th banners. In December 2024, the company completed its acquisition of Neiman Marcus Group for $2.7 billion, expanding its portfolio by adding Neiman Marcus and Bergdorf Goodman brands.Ā
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The acquisition was intended to turn Saks into a luxury retail powerhouse and improve its financial standing. Instead, it has become an expensive nightmare.
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Before the acquisition, Saks had been under fire for delayed payments to vendors. However, the companyās CEO Marc Metrick stepped in to ease concerns, reassuring that the deal would allow it to settle outstanding debts since the combined portfolio was estimated to be worth $7 billion.
Saks struggles with financial pressures
The uncertain state of the economy and a slowdown in consumer spending, which has contributed to an ongoing luxury slump, have buried Saks in even more debt. Recent tariff implementations and acquisition-related costs have only added to its many challenges.
So much so that in the first quarter of 2025, Saksā revenue dropped nearly 16% year over year, with its net loss increasing by 38%.
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In February, Saks announced plans to repay vendors for overdue payments in 12 installments beginning in July, aiming to rebuild relationships with its suppliers and increase inventory.Ā
Three months later, the company secured $350 million in financing commitments, bringing its total available liquidity to around $700 million.Ā
āAlong with synergy realization and business performance exceeding our plans, we are well-positioned to continue delivering for all of our stakeholders, including our brand partners,ā said Metrick in a press release.
Vendors accuse Saks of not delivering on payment promises
Despite the reassurance, June has come and gone, and vendors claim the company has not upheld its commitment.
Sunday Riley Skincare emailed Saks this month, accusing the company of failing to make the promised payments. The brand warned that unless it is paid in full, the situation will be escalated to its legal department, as reported by RetailDive.
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Representatives of other anonymous brands have also alleged that Saks has implied that they will be dropped as vendors if they continue to complain.
At least one brand has reportedly stopped shipping products to Saks completely and has given up on receiving payments.Ā
Saks has yet to issue any official statements regarding the accusations, but it remains to be seen whether the claims are factual.Ā
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