00:00Saks Fifth Avenue, one of America's most iconic luxury department stores, is facing a potential Chapter 11 bankruptcy as mounting debt and missed interest payments pressure the company's future.
00:10The company is reportedly seeking about $1 billion in emergency funding after failing to make a $100 million interest payment in late December.
00:18So what happened?
00:20The trouble deepened after Saks bought Neiman Marcus, a deal that only increased its debt as luxury spending started to slow.
00:26Its previous CEO, Mark Metrick, stepped down in early January as the luxury department store struggled to manage its debt.
00:34And now it'll be up to Richard Baker, a lifelong real estate investor, to convince lenders to help him turn things around.
00:41But those who have worked with Baker say he makes big bets that don't always succeed.
00:46Hudson's Bakel in Canada shuttered its doors for the first time in 355 years on Baker's watch.
00:53At the end of 2024, Baker's sealed the deal for Saks to buy Neiman Marcus.
00:58But at this point in time, Saks was already behind in paying vendors for high-end apparel and accessories that they were sending to U.S. stores.
01:07Those suppliers started to slow their shipments, worried about the overdue bills, which meant there wasn't as much merchandise on shelves as befit a luxury department store.
01:15That's all right.
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