**New York**: Following its acquisition of Neiman Marcus Group, Saks Global has unveiled a comprehensive plan to reset its business model, focusing on improved vendor payments and enhancing brand partnerships, while aiming for significant cost reductions and innovative retail experiences through AI and collaboration with Amazon.
Saks Global, the newly established luxury retail conglomerate formed after the acquisition of Neiman Marcus Group by Hudson’s Bay Company, has announced a strategic plan aimed at “resetting” its business operations in response to the challenges faced over the past year. This recalibration, unveiled in communications with vendors, seeks to enhance partnerships with key brands while simultaneously addressing significant financial obligations owed to those vendors.
In an exclusive interview with Women’s Wear Daily, Marc Metrick, the CEO of Saks Global, emphasised the need for a transformation of the multibrand luxury distribution model, stating, “We are resetting the multibrand luxury distribution model, not because we feel like it. It’s because the model no longer works.” Metrick acknowledged persistent issues over the last 29 years, notably in financial processes impacting vendor payments.
Effective from 1 March 2025, Saks has instituted a new payment schedule whereby vendors will receive payment 90 days from the receipt of inventory. Additionally, all past due balances will be resolved in twelve monthly instalments commencing July 2025. This approach aims to reduce complications in payment processes and ensure clearer expectations for vendors, particularly for smaller entities that have faced delays in payment.
Despite no precise figures disclosed regarding the total debts to vendors, estimates indicate this amount could reach into the hundreds of millions. Metrick noted, “I’m very sympathetic to where Saks has been, but at the same time, not one brand partner of ours is losing money with our company,” drawing a comparison to the financial struggles encountered by other luxury retailers during the bankruptcy phase of companies like Barneys New York.
Following the acquisition finalised in December, Saks Global now encompasses Neiman Marcus, Bergdorf Goodman, Saks Fifth Avenue, and Saks Off 5th, effectively forming a $10 billion luxury retail entity. Metrick highlighted the importance of establishing stronger, more accountable partnerships with 3,000 brands currently in collaboration, albeit with projections suggesting that they will ultimately conduct business with around 25% fewer brands in order to enhance their partnership quality.
Significant changes to the operational structure are already underway, with the introduction of a streamlined management team that merges tasks traditionally held by separate entities under the Saks and Neiman Marcus brands. Metrick has noted that, “We expect to realise significant synergies that will further improve our financial position,” anticipating an annual cost reduction of approximately $500 million in the coming years.
In addition to restructuring partnerships and financial obligations, Saks Global is also looking to innovate within its customer experience through the strategic application of artificial intelligence. Metrick has hinted at an upcoming collaborative initiative with Amazon aimed at creating unique retail experiences, without disclosing specific details.
Amidst these changes, the firm welcomes Mark Weinsten as the interim chief financial officer, succeeding Jeff Pedersen who departed after a brief tenure. Metrick explained that the transition to Weinsten was necessary given the company’s expansion and diversification from a pure digital model to a multifaceted retail organisation.
Metrick has reiterated his commitment to enhancing relations with brand partners, urging them to continue shipping merchandise to facilitate a return to normal operational levels. “We are committed to fulfilling all of our obligations to our brand partners,” he stated, underscoring the necessity of collaboration for long-term growth. As Saks Global navigates these significant transitions, its leadership remains focused on establishing a robust and resilient brand ecosystem within the competitive luxury retail market.
Source: Noah Wire Services
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