Saks Achieves $1.6 Billion in Sales During Bankruptcy Period, Suffers $63 Million Loss

Saks is showing signs of recovery even before emerging from bankruptcy. The U.S. luxury department store chain posted sales of $1.6 billion in the period from January 14th to May 2nd. However, the company also posted losses of $63 million.

According to WWD, documents filed by Saks as part of its bankruptcy exit process show that selling, general and administrative expenses amounted to $706.8 million, and the reorganization cost $470.3 million.

Saks’ financial performance is positive as the company moves forward in its emergence from bankruptcy. Thus, according to the summary document of its operations, during the last month for which data are available (ended May 2nd), the group has recorded revenues of $422.6 million, already with net profits of $64 million.

Saks improves accounts as suppliers resume shipments of merchandise

Saks’ business, therefore, has shown significant improvement as suppliers resumed merchandise shipments, and analysts expect it to showan even stronger position once the reorganization is finally completed. Saks is now led by Geoffroy van Raemdonck, who previously headed Neiman Marcus.

“Saks’ profitability and performance continue to improve month-over-month as we have gained access to more inventory,“ the executive said. “This momentum sets us up to emerge as a stronger, more focused company, well positioned to drive profitability,“ he added.

Saks’ restructuring process has included the closure of more than half of its stores, as well as the majority of Saks Off 5th stores, which will now be used primarily to liquidate inventory. An e-commerce agreement with Amazon was also cancelled.

Thus, in recent months, Saks has focused on its core business, on strengthening relationships with brands, selling in a focused manner in the luxury segment and in full-price sales. The goal has been, at the same time, to simplify its supply chain and reduce corporate headcount.

When Saks emerges from bankruptcy it will have access to $500 million in exit financing and a new deal that should provide it with the resources it needs to continue its evolution.