Saks Global is poised to unveil key elements of its business plan in a matter of weeks, after obtaining the final $300 million tranche of its $1.75 billion financing package, announced when it filed for bankruptcy in January.
An ad hoc group of the luxury department store retailer’s senior secured bondholders approved the five-year business plan, which Saks Global CEO Geoffroy van Raemdonck said aims for “double-digit adjusted EBITDA margin” and “profitable and sustainable growth.”
"We have made significant progress over the past two months as we work to position Saks Global for the future, quickly stabilizing our business, improving inventory flow and investing in our transformation," he said in a statement.
Indeed, the company appears to be making steady progress on the inventory front, with nearly 600 brands releasing $1.4 billion in retail receipts, up from about 500 earlier this month and fewer than 400 a few weeks ago. In March, month to date, Saks Global’s merchandise receipts are up 60% compared to the same period a year ago, according to a press release Monday.
This corrects a major problem that plagued Saks Global for the entirety of its existence – a dearth of merchandise to sell, stemming from unpaid supplier invoices.
The company has also moved swiftly to shrink its footprint, with plans to close almost all of its off-price stores and 24 full-line stores (20 Saks Fifth Avenue and four Neiman Marcus locations), part of its renewed focus on luxury customers. Bergdorf Goodman’s only two stores, across the street from each other on the Upper East Side in New York, will remain open.
This week Saks Global also said it has streamlined its supply chain, by “prioritizing three go-forward distribution and service center facilities in Texas, Pennsylvania and California.” That and the brick-and-mortar closures mean hundreds of layoffs, including nearly 600 people let go from two Pennsylvania facilities.
"This is tremendous progress in a very short period of time," van Raemdonck said.
