Background: Saks Fifth Avenue is one of New York’s most iconic department stores, selling luxury fashion for more than 160 years. In 2024, it doubled down on scale, paying $2.7 billion USD to acquire rival Neiman Marcus and roll everything into a new entity called Saks Global.

What happened: Now, Saks Global has filed for bankruptcy protection in the US. The simple version? Debt kept rising while sales kept sliding. Suppliers were left waiting to get paid, with Chanel alone owed more than $136 million USD. The damage isn’t limited to global giants either, with Australian designers like Camilla, Aje, Rebecca Vallance and Naked Wolfe now owed millions and unlikely to recover much of it.

What else: This isn’t just a US retail story. It’s a warning shot for department stores everywhere, including David Jones and Myer, who are still trying to reinvent themselves in a world that is rapidly shifting toward direct-to-consumer shopping.

What's the key learning

💡The department store business model ain’t what it used to be. Previously, it was the crown jewel of retail, but department stores have been steadily losing relevance for decades.

💡History shows this pain isn’t new, and Saks Global is the latest name on a very long list:

• Barneys New York collapsed in 2019
• Lord & Taylor shut after 195 years
• Hudson’s Bay, one of the oldest department stores in the world, closed 96 stores last year

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💡But interestingly, Saks is still quite bullish on its business. Saks says it has nearly $2 billion USD in financing and plans to keep stores open, so this looks more like a financial reset than a funeral… for now.