The $2.7 billion acquisition of Neiman Marcus by Saks Fifth Avenue’s owner last year was intended to create a new luxury retail leader. Instead, Saks Global, the name of the combined group, is facing declining sales, payment delays, and increased competition from rivals such as Bloomingdale’s and Nordstrom.

Sales at Saks Fifth Avenue dropped 16% in the quarter ending June compared to a year earlier, according to Bloomberg Second Measure, which tracks debit and credit card spending. Combined sales at Neiman Marcus and Bergdorf Goodman declined 10% during the same period, with June marking the steepest drop.

In contrast, sales at Bloomingdale’s and Nordstrom rose more than 10% in the same quarter, according to the same data. At Bloomingdale’s, sales increased by 13% in June, while Saks reported a 28% decline and Neiman Marcus/Bergdorf Goodman a 26% drop.

Saks Global, a closely held company, has responded by borrowing more to stabilize operations and pay $275 million in overdue vendor invoices. It recently secured $600 million in financing to begin making payments and resume vendor shipments.

Some luxury vendors had previously delayed or reduced merchandise deliveries over concerns about non-payment, a move that risked leaving Saks without adequate inventory ahead of the holiday season.

The data from Bloomberg Second Measure may underrepresent high-end shoppers who tend to use credit cards more often than debit cards. Still, the trajectory of the revenue decline has raised questions about the group’s strategy and operational execution.

Following the acquisition, Saks had planned to cut costs, unify supply chains, and modernize technology across both banners. However, delays in vendor payments and reported customer complaints over fulfillment, returns, and refunds have drawn attention.

“Bankruptcy risk remains given what appears to be a multitude of execution problems impacting customer experience,” said Bloomberg Intelligence analyst Mary Ross Gilbert, citing a review of online complaints about damaged packaging, return charges, and refund issues.

The impact on client experience stands in stark contrast to that of competitors. While Bloomingdale’s has also faced complaints about shipping delays, those were generally considered less severe.

A Saks spokesperson stated the company had implemented new processes to reduce return times to 7–10 days and was focused on delivering high-quality merchandise moving forward.

The downturn has been sustained. Saks Fifth Avenue has experienced an average quarterly sales decline of nearly 21% since early 2023. While Neiman Marcus and Bergdorf Goodman had seen year-over-year sales gains in late 2024 and early 2025, the most recent quarter experienced a return to negative growth. Meanwhile, Bloomingdale’s and Nordstrom reported consistent year-over-year growth across the past four quarters.

The pressure is particularly acute as Saks stocks its warehouses for the upcoming holiday season, running from November through January. If vendors continue to hold back, the retailer risks missing sales opportunities at a critical time.

Some brands, however, are maintaining support. Rails, a Los Angeles-based fashion label, has continued shipments despite being owed “a couple of million dollars,” according to CEO Jeff Abrams. He noted the company is receiving partial payments via Saks’ financial intermediary.

“We’re in the window where, I think, investors and brands are looking to see how the proposed game plan is actually going to play out in real life,” said Abrams.

Rails is also expanding its direct-to-consumer retail footprint to reduce reliance on third-party department store partners.

Saks Global, meanwhile, said it expects vendor shipments to normalize as payments are made and inventory flow improves.

FashionNetwork.com with Bloomberg