Saks Global secures final $300 million tranche of financing package

Investing.com -- Saks Global Enterprises LLC announced Monday it has secured access to an additional $300 million of the $1.75 billion in committed capital following approval of its five-year business plan by an ad hoc group of the company's senior secured bondholders and the achievement of other key milestones. This final tranche completes the pre-emergence financing package.

The luxury retail company said the funding will provide sufficient liquidity to continue supporting operations and advancing its transformation as it focuses on serving luxury customers, strengthening brand partner relationships and driving full-price selling.

"We have made significant progress over the past two months as we work to position Saks Global for the future, quickly stabilizing our business, improving inventory flow and investing in our transformation," said Geoffroy van Raemdonck, CEO of Saks Global.

Van Raemdonck added that with continued support from capital partners, the company is working to realize the combined potential of its three banners - Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman - achieve double-digit adjusted EBITDA margin and drive profitable and sustainable growth.

Key elements of the business plan, which assumes growth and profitability fueled by a strong liquidity position, will be included in the company's plan of reorganization. This is expected to be filed with the U.S. Bankruptcy Court for the Southern District of Texas within the next several weeks.

Since mid-January, the company has executed several strategic actions. Shipping has resumed by nearly 600 brands, releasing $1.4 billion in retail receipts. These efforts resulted in a nearly 60% increase in merchandise receipts in March month-to-date versus the same period last year.

The company is advancing the planned optimization of the Saks Fifth Avenue and Neiman Marcus store portfolio, creating a more productive footprint comprising the best-performing and most desirable locations in markets with a high concentration of luxury customers.

Saks Global is streamlining its off-price business to 12 locations serving as a selling channel for residual inventory from Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman.

The company is also streamlining the supply chain network, prioritizing three distribution and service center facilities in Texas, Pennsylvania and California, which have been invested in over recent years, to support faster shipping, improve the customer experience and drive cost efficiencies.

Van Raemdonck said the company remains focused on building on this momentum as it works toward emerging later this year.

Willkie Farr & Gallagher LLP and Haynes and Boone, LLP are serving as legal counsel, PJT Partners LP is serving as investment banker, Berkeley Research Group is serving as financial advisor, and C Street Advisory Group is serving as strategic communications advisor to the company.

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