A pedestrian passes in front of the Saks Fifth Avenue store in Chicago on December 30, 2025.
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Embattled retail chain Saks Global is struggling to raise as much as $1 billion to stay afloat amid the possibility of filing for Chapter 11 bankruptcy, CNBC reported.
The company is working to secure “debtor-in-possession” financing to help finance its operations should it potentially file for bankruptcy, the people said. But investors have so far shown little interest in lending money to Sachs, skeptical that it can successfully turn around and repay the debt, said the people, who asked not to be identified because the matter is private.
DIP lenders will be repaid before other creditors during bankruptcy proceedings, but they won’t necessarily get their full investment back, and some investors are concerned that could happen if they loaned to Sachs, the people said.
The 159-year-old department store, which currently owns Neiman Marcus and Bergdorf Goodman, is both a destination and a symbol of luxury fashion, known for carrying top brands like Chanel and Dior and up-and-coming brands like Good American. Saks Global operates more than 70 full-line luxury stores and approximately 100 off-price stores across the company.
Only a “limited number” of investors have expressed interest in financing the DIP loan, and many others have declined to get involved, the people said, since Sachs defaulted on interest payments to bondholders late last month.
Sachs declined to comment on investor interest in its fundraising efforts.
A wide range of companies, including major banks and private equity firms, are investing in companies that could be headed for bankruptcy. But at this point, the only companies likely to be interested in investing in Saks are liquidators that also have investment vehicles or alternative asset managers with distressed retail experience, the sources said. Still, some of those investors reportedly refused to commit to DIP loans to Sachs.
Liquidation is one of several outcomes that Sachs could face. However, that scenario becomes more likely if you are unable to obtain a DIP loan, which is used to pay for necessities such as payroll, rent, and inventory. Retailers are already struggling to pay these costs.
Failure to come up with a financing plan would prevent Saks from filing for Chapter 11 bankruptcy, but it would give Saks a chance to rebuild and potentially find a buyer to take over the business as a going concern. It could then face Chapter 7 bankruptcy, pending liquidation.
That could mean the end of one of the most famous department stores in history. The Fifth Avenue flagship store, considered its most valuable asset, has become a global destination.
Meanwhile, Saks is in talks with liquidators for many of its stores in the process of closing, but not yet for the chain as a whole, the people said.
Saks’ woes have worsened since it acquired longtime rival Neiman Marcus in 2024 in a debt-laden $2.7 billion deal.
The alliance between the two rival companies was expected to create a luxury retail giant that could more effectively streamline costs and negotiate with vendors.
Instead, Saks has struggled to pay vendors on time, leading to inventory shortages and declining sales. The problem is exacerbated by a slowdown in the overall luxury goods market, which has seen stagnant growth in recent years.
