After weeks of bracing for bad news, shoppers and workers at three high-end department stores just got an unexpected reprieve. Bankruptcy-hit Saks Global has quietly reversed course and decided to keep open three locations it had lined up for closure this spring, a late-game pivot that lands right in the middle of tense landlord talks and a high-stakes Chapter 11 overhaul.
In an email to CoStar News, Saks Global said the stores will “remain open following recent productive conversations with our landlords and further evaluation.” The locations on the no-longer-closing list are the Saks Fifth Avenue at The Gardens on El Paseo in Palm Desert, the Saks Fifth Avenue at The Mall at University Town Center in Sarasota, and the Neiman Marcus at The Westchester mall in White Plains.
Bankruptcy And The Store-Cutting Plan
Saks Global filed for Chapter 11 protection in January and has been rolling out waves of closures targeting underperforming stores, according to AP News. Company leadership has framed the shrink-to-survive strategy as a way to concentrate investment in places with a higher density of luxury shoppers, rather than keeping a sprawling national footprint on life support.
Why Landlords Mattered
CoStar News reports that Simon Property Group, which owns the malls housing all three stores, entered into discussions with Saks that ultimately helped pull those locations off the chopping block. Retail consultants told CoStar that in Chapter 11, threatened closures often double as negotiation tools, giving chains leverage to seek looser lease terms or other concessions from landlords scrambling to avoid big-box vacancies.
Financing That Keeps The Lights On
Saks Global has secured a roughly $1.75 billion financing commitment and recently tapped an additional $300 million from that pool after bondholders signed off on a five-year business plan, according to a company release reported by PR Newswire. Executives say that cash is intended to keep day-to-day operations running and bankroll a formal plan of reorganization that will be put before the bankruptcy court.
What Shoppers And Staff May Face
The Palm Desert, Sarasota and White Plains stores appeared on a March 6 closure list and were expected to start going dark in May, with liquidation sales already underway at several other Saks Global locations, AP News reported. For employees and mall managers tied to the three spared sites, the reversal amounts to a stay of execution. Still, the company has been clear that, once the restructuring is complete, its national store count is likely to be significantly smaller than it was before the bankruptcy filing.
Legal And Financial Stakes
Chapter 11 proceedings in Texas will determine whether Saks can assume key leases, lock in exit financing and secure creditor approval for its turnaround blueprint, according to REBusinessOnline. Outcomes on those motions will help decide which locations survive, which are sold off and which ultimately close, with ripple effects for mall vacancy rates and how much money landlords and other creditors are able to recover.
What To Watch Next
Saks says its strategy for “optimizing” the store footprint centers on markets with a heavy concentration of luxury shoppers and that it plans to keep serving customers in those areas, according to the company statement cited by PR Newswire. Local officials, store employees and mall owners in places like White Plains, Palm Desert and Sarasota will be watching the next round of court filings and lease negotiations closely to see whether this last-minute save turns into a long-term stay or just a brief pause before the next round of cuts.
