NJ’s only Saks Fifth Avenue to close as part of Chapter 11 process

The basics:

• Saks Fifth Avenue at American Dream to shutter this spring
• Closures part of Saks Global Chapter 11 bankruptcy process
• 57 Saks OFF 5th stores also closing, affecting NJ workers
• Company to focus on profitable retail locations

New Jersey‘s only Saks Fifth Avenue location is among nine stores nationwide that will permanently shutter this spring. The closure comes as part of its parent company’s ongoing bankruptcy proceedings.

In a Feb. 10 update, New York City-headquartered Saks Global said the store at American Dream in East Rutherford will wind down in the coming weeks.

Along with the two-story outpost in the megamall’s luxury wing, Saks Global is closing Saks Fifth Avenue stores in Birmingham, Columbus, New Orleans, Philadelphia, Phoenix, Richmond and Tulsa. A Neiman Marcus in Boston will also go dark, Saks Global said.

In a statement, the company said the move is part of an effort to streamline operations, cut costs and “focus on profitable locations with the highest growth potential.”

“Go-forward locations are being determined as part of the company’s ongoing footprint optimization plan, based on a number of factors including performance and lease economics,” Saks Global said.

All merchandise purchased during the closing sales will be final and not eligible for return or exchange. Merchandise purchased at any closing location during the closing sales will not be eligible for return at any non-closing location, Saks Global said.

A spokesperson for American Dream declined to comment to NJBIZ.

Also closing

Following the closures, 25 Saks Fifth Avenue stores and 35 Neiman Marcus stores will remain. Saks Global will also continue operating e-commerce businesses for both brands.

The announcement comes about two weeks after Saks Global unveiled plans to close 57 Saks OFF 5th stores. The move impacts all but one of the off-price retailer’s locations in New Jersey.

Closing sales are underway in Bridgewater, Shrewsbury and Elizabeth. According to a notice filed with the New Jersey Department of Labor & Workforce Development, 69 workers at those stores will lose their positions by May 4. Those three locations are among the 54 leases being auctioned off by New York City-headquartered A&G Real Estate Partners.

Going forward, the company aims to keep 12 Saks OFF 5th outposts open. Within New Jersey, the store at Bergen Town Center in Paramus will keep its lights on, Saks Global has said.

Getting in a better position

Saks Global filed for Chapter 11 last month, citing inflation, tariff-related uncertainty with potential lenders and declining foot traffic.

As part of the process underway in U.S. Bankruptcy Court for the Southern District of Texas, Saks Global said it hopes to reposition the existing operational footprint for success.

The filing came less than a year after the company bought rival luxury retailer Neiman Marcus in a heavily financed $2.7 billion deal. However, even prior to acquisition, Saks had struggled with a broader slowdown in the luxury market. To fund operations and turnaround efforts, Saks Global secured $500 million of a broader $1.75 billion financing package from an ad hoc group of bondholders and asset-based lenders.

The company has made other changes to its portfolio, such as closing the five remaining locations of Neiman Marcus outlet entity Last Call.

Horchow online closing shop

Additionally, Saks Global is shutting down luxury home décor brand Horchow’s online business. Starting Feb. 19, customers looking for Horchow products will be redirected to the home category on NeimanMarcus.com.

There are no changes to two Bergdorf Goodman stores in New York City, Saks Global said.

In a statement this week, Saks Global Chief Executive Officer Geoffroy van Raemdonck shared, “We are initiating a series of actions to reinforce Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman as the ultimate destinations for luxury with a seamless multi-channel shopping experience.”

“By optimizing our operational footprint, we will be better positioned to deliver exceptional products, elevated experiences and highly personalized service across all channels, while simultaneously positioning our company to make investments that enable long-term growth and value creation,” he said. “Importantly, opportunities within the luxury market remain strong, and Saks Global is primed to play a distinct, enduring role within the industry for many years to come.”