The $700M in Market Share ‘Up for Grabs’ in the Saks Global Bankruptcy

Most of the talk around Saks Global’s bankruptcy has centered on the heartache, broken promises and lost money that fashion’s endured — but there’s a bright side for competitors looking to grab market share.  

And there might be $700 million up for grabs, according to Oliver Chen, a retail analyst at TD Cowen. 

Store closings are a regular feature of retail bankruptcies as companies in Chapter 11 can exit otherwise locked-in-place leases. 

Saks Global has 70 department stores between its namesake chain, Neiman Marcus and Bergdorf Goodman. Just which ones will go dark is a call for a federal bankruptcy judge in Houston, but the company has already done some work on where to cut. 

Before the filing on Tuesday, an insider told WWD that the retailer would close at least 20 department stores, with the Saks chain taking the majority of the hit. One place to start could be the eight shopping centers that have both a Saks and a Neiman Marcus, from Houston Galleria to Bal Harbour Shops in Miami. Both chains also have stores in Beverly Hills. 

“Based on our proprietary shopper overlap analysis, Saks Global shoppers also shop at Nordstrom, Bloomingdale’s, Macy’s, Revolve and Farfetch, among others — positioning these retailers as the most likely share beneficiaries from Saks Global closures and/or disruption,” Chen said in an analysis.  

LuxExperience, which owns Mytheresa and Net-a-porter, is also well positioned, he said. 

The market share opening could could run from $500 million up to $1 billion, said Chen, who settled on a midpoint. To get to $700 million, Chen estimated about 20 percent of Saks Global’s stores would close and then further assumed that closed stores only ran at roughly 50 percent the productivity of the overall fleet. 

“This results in approximately 11 percent share displacement on an estimated approximately $6.5 billion fiscal 2025 sales” at Saks Global, Chen said. 

Nordstrom has the biggest overlap with Saks Global, at 25 percent, while Bloomingdale’s sits at 22 percent and Macy’s at 20 percent, he said. (Macy’s Inc. owns both Macy’s and Bloomingdale’s.)

“Macy’s and Nordstrom could be positioned as the largest share beneficiaries, with estimated incremental gains of approximately $300 million for Macy’s…and approximately $170 million for Nordstrom,” he said. 

The analysis also estimated that LuxExperience could capture about $60 million in additional sales this year while Revolve might pick up $45 million to $50 million. 

Still, the Saks Global bankruptcy is a tough hit for fashion. 

“The events unfolding are unfortunate for the overall health of the industry and vendors with less scale are likely suffering from the Saks Global filing and more,” Chen said. “On the other hand, less fresh merchandise given vendor disruptions combined with store rationalization in conjunction with competitive intensity at luxury retail peers as well as direct-to-consumer channels could yield upside at other companies.”

The analyst reiterated his stance on the luxury shopper, despite the bankruptcy. 

“The high-end customer remains strong given positive wealth effect momentum, better consumer confidence at the high-end customer; an abundance of luxury fashion newness on the most creative changes the industry has seen in the last decade, and a transition we are seeing from quiet to more expressive luxury,” he said. “Furthermore, the U.S. luxury market is outpacing trends in China and other markets, globally.”

It’s just hard to see any of that at Saks Global, which ran out of money to pay vendors and was starved of sales and carrying too heavy a debt load.