Amazon is urging a federal judge to dismiss Saks Global’s financing plan related to bankruptcy, stating in legal documents that the troubled store “exhausted hundreds of millions in less than a year” and did not adhere to their contract.
When Saks took over Neiman Marcus for $2.7 billion in December 2024, Amazon contributed $475 million to the initiative based on the promise that the retailer would sell its products on Amazon’s platform and that Amazon would provide technological and logistical support.
“That equity stake is now presumably without value,” Amazon’s lawyers stated in a filing on Wednesday, shortly after Saks sought Chapter 11 bankruptcy protection. “Saks consistently failed to fulfill its financial plans, depleted hundreds of millions in less than a year, and accrued additional hundreds of millions in outstanding invoices owed to its retail associates.”
As part of the agreement, Saks introduced a “Saks at Amazon” storefront on the online retail giant’s site, showcasing a variety of luxury fashion and beauty items. It also consented to pay a referral fee for Saks-branded products sold on the site, ensuring a minimum of $900 million in payments to Amazon over eight years.
In its submissions, Amazon contended that Saks’ bankruptcy financing strategy negatively impacts both the company and other creditors, as it burdens sections of the Saks corporation with new debt that was not previously present. It also demotes Amazon’s priority in repayment, which diminishes the potential recovery the e-commerce firm could realize during the legal process, as stated in the filings.
Amazon expressed that it “hopes” Saks will address its issues, yet if it fails to do so, it might “pursue more severe actions,” including the appointment of an examiner or trustee.
During a Wednesday hearing in U.S. Bankruptcy Court in Houston, Judge Alfredo Perez permitted Saks to begin utilizing $1.75 billion in new bankruptcy financing after the company claimed it would encounter immediate liquidation without such funds. He has not yet made a decision regarding Amazon’s request.
Saks’ acquisition of Neiman Marcus attracted a variety of new investors, including individuals from the tech sector. For Amazon, the arrangement assured Saks’ visibility on its extensive online marketplace, where the company has aimed to draw larger brands and enhance its luxury offerings.
The Saks agreement also raised the likelihood that Amazon could amplify its investment in the department store chain. Amazon has been eager to solidify its footprint in physical retail and has tested several strategies over the years, discontinuing some along the way.
The company has also entered similar investment partnerships before. In 2022, Amazon acquired a 2% stake in Grubhub in exchange for the food delivery service enhancing perks for Prime subscribers. Amazon increased its stake in the firm to as much as 18% in 2024.
Amazon and Saks both opted not to comment beyond their statements in the filings.
Tech giant Salesforce also became a minority shareholder in Saks during its acquisition of Neiman Marcus, but held a smaller stake than Amazon. It remains uncertain if it intends to challenge the bankruptcy plan as well.
Correction: A previous headline in this piece inaccurately cited the Amazon filing.
