The conglomerate, which filed for Chapter 11 protection earlier this month, stated the move aims to realign the business toward full-price luxury sales.
The decision comes barely a year after a merger consolidated Saks Fifth Avenue, Bergdorf Goodman and Neiman Marcus into a single entity. According to court filings cited in the report, the off-price division was a financial drag on the company, with the Saks OFF 5TH business—encompassing both brick-and-mortar and online operations—projected to lose $139 million in fiscal year 2025.
Under the restructuring plan, Saks Global will close the majority of its 74 Saks OFF 5TH stores and liquidate its eCommerce operations, including the SO5 Digital unit. The company noted that select OFF 5TH locations will remain open solely to serve as a clearance channel for residual inventory from its primary luxury chains.
Geoffroy van Raemdonck, Saks Global’s new CEO, stated that the company will cease purchasing merchandise directly for the off-price division to prioritize “core luxury businesses.”
As reported by PYMNTS earlier this month, Van Raemdonck’s tenure began amid significant executive turnover; he assumed the role in mid-January, replacing Richard Baker, who had stepped down after serving only days in the position following the departure of long-time executive Marc Metrick.
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To support operations during the Chapter 11 process, the retailer secured $1.75 billion in debtor-in-possession financing. PYMNTS noted that the 2024 merger, intended to create a “technology-powered luxury retail company” with backing from Amazon, burdened the entity with debt. Despite raising capital last summer, the company lacked sufficient funds to pay trade partners, leading many suppliers to pause shipments ahead of the holiday season.
The downsizing reflects broader structural challenges in the sector. PYMNTS CEO Karen Webster wrote that physical department stores have lost their competitive “anchor” status to digital platforms and artificial intelligence (AI) agents that now dominate product aggregation and discovery.
While luxury store counts are expected to decline, analysts suggest the resulting vacancies may provide prime expansion opportunities for surviving off-price and beauty retailers in 2026.
