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Saks Global is looking to offload a 49 percent stake in New York City luxury department store Bergdorf Goodman, The Wall Street Journal reported Sunday, citing sources familiar with the matter.
The news comes less than a year after Saks closed its acquisition of Neiman Marcus Group, which operated Bergdorf as a standalone location. Richard Baker, executive chairman of Saks Global, confirmed that the company is exploring a potential sale of a minority stake in Bergdorf Goodman. “This process is intended to unlock value for our stakeholders and de-lever our business,” he told the Journal.
Worth about $1 billion, the sale currently has four potential bidders, according to the report, including strategic investors and Middle Eastern sovereign wealth funds.
Since acquiring Neiman Marcus, Saks Global has been grappling with mounting liquidity pressures: heavy debt from the $2.7 billion deal, shrinking sales across the luxury segment and strained vendor relations that have limited inventory flow.
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In August, Saks was able to restructure its debt, including $600 million in new financing from lenders — a lifeline for making interest payments and vendor invoices. The $2.2 billion in bonds that Saks Global issued to help finance the Neiman acquisition have plunged in value since January — now trading 17 cents on the dollar.
The potential Bergdorf deal would not include the building and real estate of the store, just its operating company, according to the Journal.
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With Financing Push, Saks Global Looks to Buy Some Time
A deal to secure $500 million in new financing may push out a reckoning. But falling sales and looming payments to vendors and creditors continue to dog the luxury retailer’s post-merger vision.
