How Saks’ acquisition of Neiman Marcus plunged the company into bankruptcy: ‘Recipe for disaster’
Jan 15 2026
Saks Fifth Avenue’s acquisition of Neiman Marcus was supposed to create a luxury powerhouse, but instead it led to the company filing for Chapter 11 bankruptcy protection.
After funding the deal with $2.2 billion in junk bonds, Saks didn’t have enough money to pay its vendors.
When Saks stopped paying its vendors, it couldn’t secure the right inventory to drive sales, eventually leading to insolvency.
For more than a decade, the former executive chairman of Saks Global dreamed of adding Neiman Marcus to his collection of legacy department stores, believing the combined entities would create a luxury powerhouse strong enough to defy changes dragging down the industry.
Instead, Richard Baker’s $2.7 billion acquisition of Neiman Marcus in 2024 ultimately plunged the company into bankruptcy just over a year after the transaction closed. From the very start, the company was struggling to pay its bills — which led to angry vendors and little room for error.
In a Wednesday declaration filed in Houston’s bankruptcy court hours after Saks filed for Chapter 11 bankruptcy protection, chief restructuring officer Mark Weinsten wrote that the deal led to “immediate liquidity challenges” and created an “unsustainable” capital structure.
Mickey Chadha, Moody’s Ratings vice president of corporate finance, called it a “recipe for disaster.”
“You had the two companies that weren’t doing great, and then you combine the two companies and put on a large amount of debt,” said Chadha. “It was an unsustainable capital structure right from the beginning.” https://www.cnbc.com/2026/01/15/saks-acquisition-of-neiman-marcus-led-to-bankruptcy.htmlIMO, Neiman Marcus made its money from Texans. When Saks took them out, it destroyed that Texas bond to the store and sales plummeted.
