At this point Saks Global has nowhere to go but up. The luxury department store giant — a combination of Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman that lasted about a year before filing for bankruptcy — has used the Chapter 11 process to clear out a lot of debt, close underperforming stores and make up with long-suffering vendors.
But how much progress can Saks Global make in the next five years? Probably not as much as the company says, as few observers believe its financial projections are all that realistic.
According to bankruptcy court filings earlier this month, Saks Global expects that revenue from fiscal years 2027 to 2030 will grow at a compound annual growth rate of about 7%. In the final year of that span, the company sees revenue growing about 5.5% and reaching close to $7.2 billion. The company expects to exit Chapter 11 some time next month with $1.2 billion in debt — less than when it entered, but still significant.
“On one level it is just about possible — especially as sales have slumped over recent years — but it is a very tall order,” GlobalData Managing Director Neil Saunders said by email. “There is no wiggle room to get things wrong, and there are a lot of assumptions that Saks can win back business and custom that it previously lost. And of course, there is still a huge pile of debt that’s going to prevent Saks from spending big on capital projects to improve customer experience or operations.”
Here are five reasons why Saks Global could miss its goals.
Reason No. 1: Saks Global would need to reverse its history of declines
Saks Global has lost sales and customers over the last couple of years, and Nordstrom and Bloomingdale’s have picked up much of the slack. Neiman Marcus’ top-line, which at times has been stronger than Saks Fifth Avenue’s, has nevertheless declined from 2% to 4% annually, according to Krishan Sutharshana, senior distressed debt analyst at Octus, speaking by video conference.
“So this is just a full reversal,” he said of the company’s guidance. “I think organically there should be some growth relative to this year, because they now have the capital to stock up their stores, at least to much better levels than they were. But I question the growth beyond that.”
Before, during and after the merger of Bergdorf Goodman, Neiman Marcus and Saks Fifth Avenue
Indeed, Neiman Marcus appears to have declined since January while Saks Fifth Avenue has been “treading water since late last year,” according to Bloomberg Intelligence Senior Retail Equity Analyst Mary Ross Gilbert, citing transaction data from Bloomberg Second Measure.
The goals for margins are even more ambitious, according to Glenn McMahon, managing partner at MAC Advisory and Consulting. The company says in its filing that savings from store closures, plus revenue from inventory replenishment and more full-price sales, will push gross margin to reach 43% this year, 44% in 2027 and 2028, and 45% in 2029 and 2030.
This assumes “stronger pricing power with consumers and tighter inventory discipline,” McMahon said.
“That combination — higher gross margin and structurally lower SG&A — implies a level of execution precision that Saks has not historically demonstrated, particularly in a wholesale-heavy luxury model where brands increasingly control pricing and distribution,” he said.
Moreover, analysts pointed out that Saks Global doesn’t expect to be profitable for three years.
“It looks ugly,” Ross Gilbert said by video conference. “It looks like there's been no signs of improvement. I read through the numbers carefully, and I thought, ‘Seriously? And then you have to wait for them to become profitable?’ The projections are ridiculous.”
Reason No. 2: Saks Global would have to outpace the luxury market
Saks Global’s revenue outlook outshines luxury sales more broadly, which are projected to rise mid-single-digits globally, according to McMahon, citing research from firms including Bain & Company and McKinsey & Company.
The luxury market is stabilizing after two years of contracting, but that recovery is uneven, according to a report this month from Morgan Stanley Research. Sales of personal luxury goods are now expected to grow 2.5% this year, those analysts found, citing rising consumer caution.
“When you actually line up the projections in the filing against both Saks’ own history and the structure of the market, the plan leans optimistic and requires multiple things to go right at the same time,” McMahon said.
GlobalData research also finds Saks’ projections “extremely optimistic.”
“They are way above forecast market growth in luxury, which means that Saks will need to take share from others to grow at these levels,” GlobalData’s Saunders said. “And that needs to be done in a market where a lot of other luxury players are sharpening their execution.”
Reason No. 3: Saks Global is operating in a declining sector
Department store retail has been under siege for years, and the sector continues to lose market share to off-price retailers and other discounters, including, lately, resale.
Sales have consistently fallen on a year-to-year basis, according to monthly reports from the U.S. Commerce Department. In the last 15 years, the demise of the model contributed to at least 175 mall closures and struggles at other malls as those centers lost anchors, according to a recent report from Green Street.
“The department store channel, where Saks primarily operates alongside players like Nordstrom and Macy’s, is structurally flat to declining,” McMahon said. “Saks is therefore underwriting a plan where it not only outgrows the broader luxury market but does so within a channel that is losing relevance and share.”
Rivals, most notably Nordstrom, lean on off-price operations to expand their customer bases, boost sales and protect market share. But Saks Global this year largely closed up its Saks Off 5th business to prioritize full-price sales, and those customers need somewhere to go.
Luxury retailers theoretically have an advantage even in a struggling segment like department stores because their customers are wealthy. But that dries up quickly when operations are subpar, according to Nick Egelanian, president of retail development firm SiteWorks.
“Just because you have a strategic advantage, that doesn’t mean you don’t have to run a good store,” he said by email. “High-end department stores from Saks to Nordstrom and others have suffered — not because they’re not needed, but because they haven’t been run well by disconnected management. In the case of Saks, it was all about money, and overexpansion killed them.”
Reason No. 4: Saks Global’s vendor recovery is not enough
A major reason for Saks Global’s bankruptcy was the hit to sales as vendors withheld inventory over unpaid invoices and delayed payments. An estimated $550 million loss in inventory receipts in the second half of 2025 also lowered its borrowing base on its previous ABL debt, which is largely based on inventory value.
Since his appointment as CEO upon Saks Global’s bankruptcy filing, Geoffroy van Raemdonck has made a point of publicizing that vendors have returned in waves, and earlier this month the number had climbed to nearly 720.
Saks Global says that its post-bankruptcy enterprise value will range between about $2.5 billion and $3.5 billion, with over $1.2 billion in debt. In that scenario, even small misses on revenue, margin or timing would quickly compress its equity cushion, according to McMahon.
“The core issue is that the plan assumes vendor recovery translates directly into consumer recovery,” and that’s a risky assumption, he said.
Luxury consumers expect a high level of service, and that could suffer given Saks Global’s cuts to staff, McMahon said. The company recently announced another 16% cut to its corporate ranks, after previous rounds of layoffs and store closures.
“As Geoffroy correctly points out, they've done a really good job of winning back vendors and rebuilding those relationships, but they haven't done the same with the customers,” McMahon said. “I think that's a little bit harder to build back. It's all about sales and service — they have to win by having the right product and assortments, and then they have to have killer sales and service, which they've not had historically for a long time.”
Reason No. 5: Saks Global is losing sales to its own suppliers
Couture fashion names have seized control of their own sales, both within and outside of department stores.
While some analysts have been surprised that Saks Global won’t be closing more locations where Saks and Neiman overlap, fashion brands’ stand-alone stores may be the bigger worry, according to Octus’ Sutharshana. Traffic to both stores has remained steady in places like Manhattan and high-end malls, despite their proximity, he said.
“A lot of their vendors have gone and opened their own stores to reach out to customers, and that I think longer term that poses a bigger threat to Saks,” he said.
The department store also receives little from concessions the brands run inside its locations. Saks Global said in its filing that it expects its gross merchandise value to reach nearly $9 billion by 2030, but much of that revenue will go to the fashion houses, Ross Gilbert said.
“A lot of these vendors are doing a GMV relationship, which means it's on a licensed basis because this way they get to own the inventory,” she said. “So GMV sounds impressive because the number’s bigger, but that's not their revenues.”
Companies asking a bankruptcy judge to approve their exit plans tend to project optimism, and Saks Global’s outlook struck many analysts as particularly rosy. The raft of numbers presented to the U.S. Bankruptcy Court for the Southern District of Texas don’t add up to much because how accurate they are remains to be seen, according to Joseph Sarachek, managing partner of Sarachek Law, a law firm that works with vendors.
“So many of the themes that have been talked about with respect to Saks are evident — about department stores, about the major brands all having their own stores,” he said by phone. “I'm not an expert in anything other than cash flow. If the sales are good, this business is going to be good. If the sales aren't good, this business is not going to be good. The bottom line is, nobody knows. I don't know. They don't know. Nobody knows.”
