In the world of retail, the longevity of a company is not an achievement, but a statistical miracle. Very few companies manage to exceed the century mark, and those that do must continually reinvent themselves. Fans of the series Mad Men will remember the urgency with which one of its clients, Menken’s, wanted to catch up with the tastes of the affluent American middle class. It was no longer enough to sell handkerchiefs and stockings with discount coupons; now they wanted wealthier customers if they wanted to stay afloat.
Reality surpasses fiction, and one of New York City’s legends has hit a rough patch. The majestic Sachs 5th Avenue, opened in 1902, was not just a store, but a cultural icon synonymous with luxury on Fifth Avenue in the city known as the Big Apple. However, behind its opulent window displays and designer boutiques lies an ugly and costly financial truth—all that glitters is not gold.
The main news is alarming: its parent company, now known as Saks Global, is facing a severe liquidity crisis and fears of an imminent Chapter 11 bankruptcy filing. Despite this, the crisis did not come out of nowhere, but was caused by an aggressive acquisition strategy and several years of being unable to pay its debts on time. Although Chapter 11 does not mean that this boutique will close its doors immediately, the outlook is not good. For now, they have to reorganize everything to restructure their debts. While the company negotiates with its creditors, it may be in the cards that this shopping center will not be completely liquidated.
What is Saks Global and why is it bankrupt?
Saks Global was preparing to dominate the US luxury market by creating a mega-giant holding company. In order to achieve this, they bought Neiman Marcus Group for $2.7 billion. However, this monumental merger did not take into account Saks’ existing liquidity problems. It is very easy to buy first and then wonder how to finance it later, according to the American mentality.
There was a very obvious clue that the company was not doing well: DBT, or Days Beyond Terms. This financial indicator measures how many days it takes a company to pay its bills to suppliers. The average for the retail industry is between 10 and 12 days, a fairly acceptable payment margin for this type of company. However, Saks’ DBT skyrocketed to critical levels, reaching peaks of up to 41 days of delay in paying its creditors.
They could appear as luxurious as they wanted, but everyone in the industry knew what was really going on. The fact is that Sachs was paying its suppliers almost a month and a half after the agreed deadline. This led to unsustainable cash flow stress throughout 2025. Financial and operating markets quickly reflected the results.
They could pretend to be as luxurious as they wanted, but everyone in the industry knew what was really going on. Sachs was paying its suppliers almost a month and a half after the agreed deadline. This led to unsustainable cash flow stress throughout 2025. Financial and operating markets quickly reflected the company’s results: Saks Global reported a 16% year-on-year drop in revenue in 2025. To make matters worse, its net loss skyrocketed by an astonishing 38% in the first quarter. It became clear Saks Global shouldn’t have bought their main competitor if they weren’t even able to pay invoices from their suppliers to begin with.
Sachs did not only pay its suppliers late. The problem was such chronic latiness that it already had an accumulated debt of around US$275 million in late payments to brands and manufacturers.
In February 2025, CEO Marc Metrick promised that outstanding invoices would be paid in 12 monthly installments, starting in July 2025. However, August arrived and multiple suppliers and the public had not received any payment. From there, it was a devastating domino effect that has led some to file for Chapter 11 bankruptcy.