Amid a merger worth $2.6 billion, Saks reportedly owes vendors hundreds of thousands.
The luxury retailer, which last month announced it was merging with Neiman Marcus, has missed payments to dozens of the brands it works with, fashion industry news source Glossy reported Monday (Aug. 5).
“What I don’t understand is how you can get someone to give you a couple of billion dollars to buy Neiman Marcus when you can’t even cough up $15,000 to pay your vendors,” said Ryan Babenzien, whose men’s sneaker brand Greats is owed that amount by Saks.
“It’s crazy to me,” Babenzien said. “They just stopped paying even though we had 100% sell-through. They even tried to place another order when they hadn’t paid us for the first one so we never sent them any more inventory.”
Many vendors are waiting on significantly greater payments. For example, CTE Watch Co., which distributes high-end jewelry and watches to wholesalers, is owed hundreds of thousands of dollars, Emilio Shnitzer-Bartocci, the company’s president of sales, said on LinkedIn.
And Babenzien estimated, going by the conversations he’s had with other owners, that Saks owes millions of dollars to more than a hundred brands.
PYMNTS has contacted Saks for comment but has not yet received a reply. A company spokesperson told Glossy that the company is committed to fulfilling its obligations to its vendors, and that the delays were “due to navigating our business through the current challenging macroeconomic environment.”
That transaction was announced early last month, with Saks purchasing rival Neiman Marcus, with Amazon taking a minority stake in the new company, which will be known as Saks Global.
As noted here at the time, the deal came about after several years of the two companies circling each other with an eye toward a possible merger.
But as PYMNTS argued in a report in mid-July, the combined company has an uphill battle when it comes to regaining the loyalty of their high-income target audience. What’s not yet known is whether the new tech-enabled capabilities brought by Amazon will be enough to restore the department store company to relevance.
“When [wealthy buyers] do shop, they don’t seem to be beating a path to department stores,” PYMNTS’ Karen Webster wrote in a recent feature. “… Department store sales are 50% below their peak in 2000, and 30% below where they were in the 1980s. The ’80s, as in 40 years ago. It’s hard to understand what people mean when they say, ‘department stores are back.’ Back from what, exactly? Coming back from zero sales during COVID to levels which don’t even match sales made four decades ago is hardly a comeback story worth writing.”
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