Saks Global, the parent company behind the 159-year-old department store that’s become both a destination and a symbol for luxury fashion, filed for bankruptcy protection after running out of cash and failing to find investors willing to finance its business.
Crucially, the retailer filed for Chapter 11, which will give it the chance to reorganize its business, clear through its debts and potentially find a buyer willing to take it on as a going concern.
The company announced Wednesday that former Neiman Marcus CEO Geoffroy van Raemdonck will immediately take over as chief executive, replacing Richard Baker, who had been in the job for just two weeks.
Saks also announced it had secured a financing commitment of around $1.75 billion in a bid to strengthen its balance sheet.
As recently as last week, Saks was having trouble lining up as much as $1 billion in financing for a so-called debtor-in-possession loan, which provides the funds to keep a business running during Chapter 11 proceedings, CNBC previously reported. If Saks hadn’t lined up the DIP loan, it made a Chapter 7 liquidation filing more likely.
