Mark Brutzkus was recently featured in a New York Post article dissecting the highly publicized Chapter 11 bankruptcy filing of Saks Global, parent company of Saks Fifth Avenue—one of the largest and most significant restructurings the luxury retail sector has seen in decades.
The article examines how the bankruptcy may affect store operations, real estate assets and potential closures following Saks’ recent expansion and acquisition of Neiman Marcus and Bergdorf Goodman last year.
Mark explains that the company’s primary objective in bankruptcy is addressing its significant debt burden. “One of the ways they’re going to be doing that is reorganizing their operations and closing what they perceive to be the underperforming stores,” he states, noting that Saks Global has already begun that process, as operational restructuring is typical of large retailers navigating Chapter 11 proceedings.
While some closures are already underway, Mark cautions that widespread shutdowns are unlikely to happen immediately, estimating that the brunt of closures could take six months to a year to materialize. “If it’s an underperforming store, it’s going to close,” he tells the New York Post. “That’s just the nature of the beast in terms of a Chapter 11 bankruptcy.” He continues to note that not all locations face equal risk, as flagship stores and key leases may be treated differently in bankruptcy proceedings.
