Saving the Luxury Store Dream
Saks Global, the parent of iconic luxury retailers Saks Fifth Avenue and Neiman Marcus, filed for bankruptcy just over a year after its inception. The fallout has sparked intense scrutiny of former chairman Richard Baker, who insists he was trying to salvage high‑end department stores.
Baker’s Defense
In a low‑profile Manhattan briefing, Baker explained that the chain’s woes stemmed from external pressures:
- Economic slowdown: Consumers cut back on discretionary spending.
- High import tariffs: Increased costs eroded profit margins.
- Digital disruption: A popular online newsletter sowed uncertainty among suppliers about payment reliability.
These factors, he argues, pushed the company into insolvency despite internal efforts to adapt.
Immediate Consequences
- Store closures: All 57 Saks Off 5th locations and the five Neiman’s Last Call outlets shut down.
- Job losses: Hundreds of employees were laid off, with additional cuts looming.
- Brand impact: Major labels such as Chanel and Zegna owe over $700 million to Saks, while smaller designers face potential disappearance without new distribution channels.
Baker’s Track Record
Baker’s history with department stores is notable:
- Lord & Taylor – Ran for 13 years, then divested the chain in pieces.
- Hudson’s Bay – Purchased and later sold in 2024; the retailer struggled post‑sale.
Each time, the business faltered after his departure, reinforcing Baker’s narrative that external market conditions were decisive.
Closing Thoughts
Despite widespread criticism, Baker maintains he strived to keep luxury retail alive. He contends that many failures were beyond his control, rooted in broader economic forces rather than mismanagement.
