Smaller vendors, still waiting on payments, debate their futures with Saks after bankruptcy

Saks Global’s bankruptcy has left many small and mid-sized vendors waiting on overdue invoices, forcing them to reconsider whether they can afford to keep supplying the retailer at all.

What is happening to payments

• Saks Global, parent of Saks Fifth Avenue, Saks Off 5th and Bergdorf Goodman, filed for Chapter 11 in January 2026 after years of mounting debt and delayed vendor payments.

• The company says it intends to keep stores open, has lined up about 1.75 billion dollars in new financing, and has publicly vowed to repay vendors, but the timing and recovery rate for past-due amounts remain unclear.

• Some small brands report being owed from the mid five figures up to six figures, after receiving only a few of the promised monthly installments in 2025 before payments stopped again.

Impact on smaller vendors

• For many small labels, the unpaid balances represent cash they need for payroll, production, and new product launches, and a number are now under severe financial strain or at risk of shutting down.

• Several brands had already halted shipments to Saks properties in 2024–2025 after losing confidence they would be paid, even though they initially saw the partnership as crucial for growth and validation.

• Lawyers representing groups of brands say individual exposures can range from around 600,000 dollars to as much as 10 million dollars, and note that some companies had Saks as their only major wholesale account.​

Likely recovery in bankruptcy

• Smaller vendors are generally treated as unsecured creditors, meaning they stand behind secured lenders and key strategic partners in the payout order.

• Experts quoted in coverage suggest that unsecured trade creditors may receive only a fraction of what they are owed, with one restructuring lawyer estimating recoveries on the order of “10 cents on the dollar” in a typical case.

• Saks has asked the court for permission to pay certain “critical vendors” in full for pre-bankruptcy balances, but that status is more likely to go to major luxury houses than to emerging labels.

How vendors are responding

• Some brands are refusing to ship any further inventory unless Saks pays upfront or on very short terms, effectively moving to cash-on-delivery or partial prepayment to limit risk.

• Others are redirecting inventory to alternative channels such as independent boutiques, online luxury platforms, or off-price retailers, even at lower margins, because those partners reliably pay.

• Advisors working with affected brands say many are cautiously open to future business with Saks, but only if the company restores trust through clear communication and demonstrable progress on outstanding balances.

Key choices facing small vendors

• Continue with Saks under stricter terms (e.g., upfront payments, shorter windows, consignment with stronger documentation), accepting ongoing counterparty risk but preserving access to a high-profile platform.

• Pause or exit the relationship, write down part of the receivable as uncollectible, and diversify into multiple smaller wholesale accounts and direct-to-consumer channels to reduce dependence on any single retailer.

• For vendors with large exposures, work with legal or financial advisors to file claims, monitor the Chapter 11 process closely, and evaluate whether being designated a critical vendor or negotiating bespoke terms is realistic.