Saks Files for Bankruptcy

Transcript

00:00Eliza, this is something that the creditors and the company have been working towards for a while,

00:05and it came a few days later than anticipated.

00:08Why did it take so long for them to actually move forward with this filing?

00:13Well, it is often very complicated, especially to arrange the bankruptcy financing

00:19that these bondholders are going to cough up after already taking such severe losses

00:23in the past year since they first financed Sachs' purchase of Neiman Marcus.

00:28So they invested $2.2 billion in December 2024, lost a lot of that money already by about June,

00:36and then they doubled down, invested more just to try to help Sachs get through a tough spot

00:41and return to profitability.

00:44That totally failed as well.

00:46So they've lost money twice now, and incredibly, they are tripling down

00:51and willing to finance this bankruptcy on the hope that the company will reorganize

00:56and eventually finally become profitable.

00:59So I think they probably had a lot of demands going into that.

01:01Yeah, absolutely.

01:02And there's also been a rotating cast of management as well.

01:07Sachs just appointed the former Neiman Group CEO, Jeffrey Van Ramdonk,

01:12Ramdonk, excuse me, as its new CEO.

01:16And this comes after the former CEO was not getting anywhere

01:18in terms of these discussions with creditors.

01:22Right.

01:22Well, I think that Richard Baker has lost a lot of faith, or people have lost a lot of faith in Richard Baker

01:28because he engineered the takeover of Neiman Marcus back in 2024.

01:34He was the chairman of Sachs Global.

01:36He was the CEO more recently, but all along he was really running the show.

01:40And under his leadership, everything got only worse.

01:44And so he had led Sachs during Sachs distress, which Sachs tried to fix by buying Neiman Marcus.

01:50And then the whole combined entity just deteriorated.

01:53And one of the accusations of mismanagement or poor decision-making really comes down to the management team's decision,

02:02if you can even really call it that, to not pay vendors on time in a desperate attempt to conserve cash.

02:08So that led to vendors not shipping, and a department store without any inventory is really no department store.