Amazon Disputes Saks Bankruptcy, Labels $475M Investment as ‘Presumptively Worthless’
Amazon.com is contesting the Chapter 11 bankruptcy filing of luxury retailer Saks Global, asserting that its $475 million equity investment has become “presumptively worthless”. The tech giant is threatening to take “drastic” action if the court does not address its concerns.
The objection to Saks Global’s bankruptcy financing plan was filed by Amazon on Wednesday, mere hours after the luxury department store chain sought bankruptcy protection. Amazon had invested significantly in Saks when the latter acquired Neiman Marcus for $2.7 billion in December 2024, with the intention of selling Saks products on Amazon’s platform.
According to court documents, Amazon’s attorneys claimed that “Saks continuously failed to meet its budgets, burned through hundreds of millions of dollars in less than a year, and ran up additional hundreds of millions of dollars in unpaid invoices owed to its retail partners.”
Despite Amazon’s objections, U.S. Bankruptcy Judge Alfredo Perez approved short-term financing of approximately $400 million for Saks after a marathon 7.5-hour hearing on Wednesday night. The company must return to court in the coming weeks to seek final approval of the entire $1.75 billion financing package. Amazon has reserved the right to pursue more drastic remedies, including the appointment of an examiner or trustee.
The bankruptcy filing signifies a dramatic downfall for Saks Global, which had aspired to establish a luxury retail powerhouse through its merger with Neiman Marcus Group. However, the combined entity grappled with massive debt as luxury sales weakened globally.
Source: CNBC