Amazon Warns of Drastic Measures Following Saks’ Bankruptcy
Amazon has expressed serious concerns regarding Saks Global’s recent bankruptcy filing. The e-commerce giant is urging a federal judge to reject Saks’ bankruptcy financing plan.
Concerns Over Financial Mismanagement
In legal documents submitted, Amazon claims that Saks “burned through hundreds of millions of dollars in less than a year.” The bankruptcy comes shortly after Saks sought Chapter 11 protection, highlighting significant financial distress.
Investment Background
In December 2024, Saks acquired Neiman Marcus for $2.7 billion. During this acquisition, Amazon invested $475 million. The investment was contingent on Saks selling its products through Amazon’s platform.
Amazon expected to bolster Saks’ offerings with technology and logistics support. However, Amazon’s attorneys marked the equity investment as “presumptively worthless” in light of recent events.
Failure to Meet Agreements
- Saks reportedly did not adhere to its budget.
- The retailer accrued hundreds of millions in unpaid invoices to its partners.
- Amazon anticipated at least $900 million in payments from Saks over eight years from sales on their co-branded storefront.
Impact on Amazon and Retail Partners
Saks had launched a “Saks at Amazon” storefront that featured a variety of luxury fashion and beauty items. The failure of Saks to meet its financial obligations raises questions about the stability of this partnership and its effects on Amazon’s investment.
With Saks’ uncertain future, both Amazon and its retail partners now face significant implications as the department store navigates its bankruptcy proceedings.
