Saks Global Pivots to Luxury by Closing Majority of Off-Price Locations

2026-01-30 companies

New York, Friday, 30 January 2026.
In a decisive strategic pivot, Saks Global will shutter 62 off-price locations, effectively abandoning the discount sector to concentrate capital exclusively on its core full-price luxury business.

Operational Contraction and Immediate Closures

The restructuring plan, announced on January 29, 2026, marks a severe reduction in the company’s discount footprint, involving the wind-down of 62 off-price operations [1]. This includes the closure of 57 Saks OFF 5TH stores and the discontinuation of the five remaining Neiman Marcus Last Call locations [2]. While the physical liquidation sales are scheduled to begin on January 31, 2026, the digital contraction is already underway; the e-commerce platform saksoff5th.com commenced its closing sale on January 30, 2026, and will subsequently cease operations [5]. Additionally, 23 Saks OFF 5TH locations are set to close their doors as early as Monday, February 2, 2026 [2].

Financial Imperatives Behind the Pivot

This aggressive contraction is driven by urgent financial necessities arising from the company’s Chapter 11 bankruptcy filing on January 14, 2026 [2][4]. The off-price division has become a liability rather than an asset, with the Saks OFF 5TH business projected to lose $139 million in the 2025 fiscal year [1]. Furthermore, the company is grappling with a substantial debt load, which escalated to approximately $3.4 billion following the merger with Neiman Marcus [3]. By shedding these underperforming assets, Saks Global aims to redirect resources toward its luxury portfolio, effectively reversing the strategy seen in 2021 when the digital arm of Saks OFF 5TH was spun off as a separate entity [1].

Stabilizing Vendor Relations

As Saks Global attempts to realign its business, it must also navigate complex relationships with its creditors. A new creditors committee has been appointed, featuring high-profile stakeholders such as Amazon, LVMH, and Chanel [3]. The inclusion of Amazon is particularly notable; the tech giant invested $475 million in Saks in 2024 but has recently objected to the retailer’s bankruptcy financing, characterizing its investment as “presumptively worthless” [7]. To mitigate supply chain disruptions during this critical period, Saks has sought court permission to issue $337 million in catch-up payments to critical vendors [3].

Future Footprint and Exit Strategy

Despite the sweeping closures, the Saks OFF 5TH brand will retain a minimal physical presence. Twelve locations will remain open in key markets, including New York, Florida, and California [2]. These surviving stores will shift their operational focus to selling residual inventory from the company’s full-line banners: Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman [5]. Looking ahead, Saks Global is required to file a reorganization plan by March 30, 2026, with an anticipated exit from bankruptcy protection targeted for early June 2026 [4].

Sources

Retail Bankruptcy Luxury Market