In a significant move affecting the luxury retail landscape, Saks Global announced that it will close the majority of its Saks OFF 5TH locations as part of a bankruptcy restructuring strategy. The decision, revealed Thursday, comes in the wake of the company’s Chapter 11 filing earlier this year, which allows for debt negotiation and operational overhaul without liquidating assets.
A total of 57 Saks OFF 5TH stores across the United States will close, leaving only 12 locations operational. Additionally, Saks will shut down all five remaining stores under the Neiman Marcus off-brand entity, Last Call. The company did not disclose how many employees will be impacted by these closures.
The backdrop to this decision is the substantial financial challenge faced by Saks Global, which is grappling with over $2.5 billion in debt following its acquisition of Neiman Marcus in 2024. This debt burden has been exacerbated by a long-term decline in the department store shopping model, heightened by a significant shift toward online retail—a trend that accelerated during the COVID-19 pandemic.
While the luxury market briefly surged in the post-pandemic period, demand has since faltered, particularly among Chinese consumers and younger shoppers whose preferences are evolving. Saks Global’s strategy reflects a pivot back to its luxury roots, indicating a desire to focus on full-price retail experiences rather than off-price sales channels.
Starting Monday, 23 OFF 5TH stores will close their doors permanently, while the remaining 34 locations will initiate closing sales on Saturday, with closures expected to follow in the coming weeks. The 12 stores that will remain open are strategically located in key markets, including New York, Florida, New Jersey, Georgia, California, and Texas.
As Saks Global re-evaluates its business model, the future of luxury retail remains a pivotal topic, with many retailers navigating the complexities of evolving consumer behavior and market demands.
