A judge rejected Amazon.com’s first attempt to stop Saks Global Enterprises from going to Chapter 11 and authorized emergency financing for the luxury retailer’s judicial recovery in the United States.
The e-commerce giant alleges that Saks breached an agreement to sell its products on Amazon’s platform and says its stake in the now-recovering business is “presumably worthless.” After a 7:30 hearing that lasted through the night, Saks gained access to around US$400 million in cash, but will have to return to court in the coming weeks to try to obtain definitive approval of the entire financing package, worth US$1.75 billion.
Amazon and other creditors also contesting the loan may try again to convince U.S. bankruptcy judge Alfredo Perez to overturn or amend the debt agreement. In testimony in Houston on Wednesday night, Saks advisers said the company was at risk of liquidation if it didn’t receive the money immediately.
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According to Amazon, in a petition presented to the court, the financing would push Saks billions of dollars in new obligations and bring other conditions that would harm Amazon itself and other unsecured creditors of the retailer.
In 2024, Amazon purchased a minority stake in Saks as part of the deal that helped facilitate the $2.65 billion acquisition of Neiman Marcus. The company said it invested US$475 million in preferred shares in the luxury retailer as part of the transaction.
This investment was linked to an agreement for Saks to sell products on the Amazon platform, including the launch of the “Saks on Amazon” initiative, according to the document filed by the company on Wednesday. In return, Saks committed to paying a referral fee and guaranteed at least US$900 million in payments to Amazon over eight years.
“Saks repeatedly failed to meet its budgets, burned through hundreds of millions of dollars in less than a year, and racked up hundreds of millions more in outstanding invoices with its merchant partners,” Amazon said in the lawsuit.
Saks chief restructuring officer Mark Weinsten told a hearing on Wednesday that the company urgently needed new financing to continue paying suppliers, salaries and other expenses.
Without access to these resources, Weinsten said, “we will be dead in the water.” The retailer requested authorization to initially withdraw US$400 million, with the remainder of the credit being released in later stages of the Chapter 11 process.
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An Amazon spokesperson declined to comment. Saks did not immediately respond to requests for positioning.
Days before the Chapter 11 filing, Amazon had already said it would oppose financing the recovery, according to a Jan. 9 letter released Wednesday. The company says Saks needed its consent for a central part of the loan, but that Amazon refused to give the go-ahead.
Still, the retailer went ahead with financing offered by a group of existing creditors, in an arrangement that, according to Saks itself, should strengthen the business. In a statement released on Wednesday, the company stated that all of its brand stores remain open.
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