Amazon package and Saks Fifth Avenue bag.
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Amazon wants a federal judge to reject Saks Global’s bankruptcy financing plan, writing in court papers that the beleaguered department store “burned through hundreds of millions of dollars in less than a year” and failed to live up to its agreement.
When Saks acquired Neiman Marcus for $2.7 billion in December 2024, Amazon invested $475 million in the company on the grounds that the retailer would begin selling its products on Amazon’s website and that the technology company would offer technology and logistics expertise.
“This stock investment is now presumed to be worthless,” Amazon lawyers wrote in a filing Wednesday, hours after Saks filed for Chapter 11 bankruptcy protection. “Saks consistently failed to meet its budgets, spent hundreds of millions of dollars in less than a year, and racked up hundreds of millions of dollars more in unpaid invoices owed to its business partners.”
As part of the deal, Saks launched a “Saks at Amazon” branded storefront on the e-commerce company’s website, featuring a range of luxury fashion and beauty items. It also agreed to pay a listing fee for Saks-branded products sold on the platform, guaranteeing at least $900 million in payments to Amazon over eight years.
In its filing, Amazon argued that Saks’ bankruptcy financing plan harms the company and other creditors because it saddles parts of the Saks company with new debts that it did not previously have. It also pushes Amazon further down the hierarchy in terms of refunds, reducing the amount that could potentially be refunded during the process, the e-commerce company said in its filings.
Amazon wrote that it “hopes” Saks will address its concerns, but that if not, it may “pursue more drastic solutions,” including appointing an examiner or trustee.
At a hearing Wednesday in U.S. Bankruptcy Court in Houston, Judge Alfredo Perez allowed Saks to begin tapping $1.75 billion in new bankruptcy financing after the company argued it would face immediate liquidation without it. He has not yet ruled on Amazon’s request.
Saks’ acquisition of Neiman Marcus attracted a large number of new investors, including names in the technology sector. For Amazon, the deal ensured Saks’ presence on its vast online store, where the company sought to attract bigger brands and notably expand its selection of luxury goods.
The deal with Saks also raised the possibility that Amazon could deepen its investment in the department store chain. Amazon is determined to have a greater presence in physical retail and has experimented with several concepts over the years, dropping some along the way.
The company has also entered into similar investment deals in the past. In 2022, Amazon took a 2% stake in Grubhub in exchange for the food delivery company adding benefits for Prime members. Amazon has expanded its stake in the company up to 18% in 2024.
Amazon declined to comment beyond what it said in the filing. Saks did not immediately respond to a request for comment.
Software giant Sales force also became a minority shareholder in Saks when it acquired Neiman Marcus, but its stake is smaller than that of Amazon. It is not yet clear whether she also plans to oppose the bankruptcy plan.
Correction: A previous headline in this article incorrectly cited Amazon’s filing.
