Amazon Expresses Discontent with Saks
The partnership between Amazon and Saks Global has deteriorated, leading to significant legal implications. In December 2024, Amazon invested $475 million in preferred equity in Saks Global, the parent company of several luxury department stores including Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman.
Amazon’s Concerns Over Saks Global’s Bankruptcy
Recently, Amazon declared that its investment is “presumptively worthless.” The e-commerce giant has urged a federal judge to reject Saks Global’s bankruptcy financing plans, claiming they jeopardize recovery prospects for creditors. According to Amazon’s attorneys, Saks has consistently failed to meet its financial targets and accrued substantial unpaid invoices to its retail partners.
Details of the Investment
Amazon’s investment came during Saks’ acquisition of Neiman Marcus Group, worth $2.7 billion. The financing was tied to a commercial agreement that included a “Saks at Amazon” storefront. Under this deal, Saks was to pay Amazon a referral fee for goods sold online and committed to making at least $900 million in payments over eight years.
Bankruptcy Filing and Immediate Responses
On the day Saks Global filed for Chapter 11 bankruptcy, it announced a $1.75 billion financing package. Amazon contends that this plan would impose undue financial burdens on Saks, further diminishing its viability. The tech giant argues that the financing would unnecessarily increase Saks’ debt and, consequently, hurt its creditors.
- Amazon’s investment: $475 million
- Neiman Marcus acquisition: $2.7 billion
- Guaranteed payments to Amazon: $900 million over 8 years
- Pending bankruptcy financing: $1.75 billion
Court Approval and Next Steps
The federal judge overseeing Saks’ bankruptcy case approved an initial financing round on the day of the filing. Amazon is prepared to seek more drastic measures if its concerns are not addressed, including the appointment of an examiner or trustee. Both Amazon and Saks representatives have refrained from commenting publicly on ongoing developments.
