Saks Global Navigates Bankruptcy with Prime Real Estate Strategy

Saks Global's bankruptcy filing is tied to its debt-laden empire, including high-end stores like Saks Fifth Avenue. The company's real estate portfolio could be a pivotal asset for restructuring. Options include selling underperforming assets and employing sale-leaseback arrangements to maintain liquidity and operations.

Saks Global has declared Chapter 11 bankruptcy, aiming to use its premium real estate assets as leverage during restructuring. The luxury retail group, known for Saks Fifth Avenue, filed late Tuesday, following a debt-heavy takeover meant to consolidate brands like Bergdorf Goodman and Neiman Marcus.

Despite securing $1.75 billion in financing to continue operations, Saks faces tough decisions, including shutting down "dark stores." Real estate options, such as sale-leaseback arrangements, could help provide liquidity, allowing the chain to maintain operations while selling its prime properties.

The competitive landscape is intense, with luxury brands opting for their standalone stores, and Saks facing internal challenges with stores like Neiman Marcus co-locating in similar luxury centers. Strategies including cost management and portfolio reviews are underway to ensure survival.

(With inputs from agencies.)