<\/p>\n
\n\tThe corporate jet is out, the \u201cNew Saks\u201d is on the way in.\u00a0<\/p>\n
\n\tSaks Global filed its plan of reorganization with bankruptcy court on Sunday.<\/p>\n
\n\tAnd while many of the details were left blank, pending negotiations with the various stakeholders in the coming weeks, the plan will ultimately lay out just who gets what out of the Chapter 11 process. Former secured lenders are expected to come away with control of the company while unsecured creditors, including vendors, will most likely see very little for the bills that piled up before the Jan. 13 bankruptcy filing.\u00a0<\/p>\n
\n\tSaks Global has a separate five-year business plan that has been worked out with lenders, but has not been disclosed. That plan sets the strategy that will guide the retailer once it exits bankruptcy, which is expected this summer.\u00a0<\/p>\n
\n\tBankruptcies can be contentious \u2014 and there were some fireworks early on with partner Amazon \u2014 but the various parties all seem to be playing nice right now, which should help ease the way forward for the parent to Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman.\u00a0\u00a0<\/p>\n
\n\tA key benefit of the bankruptcy process is the ability to, with court oversight, get out of tough-to-break contracts, including store leases. The retailer is in the process of closing most of its Saks Off 5th doors as well as 21 department stores, mostly from the Saks Fifth Avenue nameplate.\u00a0<\/p>\n
\n\tThe company, now led by chief executive officer Geoffroy van Raemdonck, is also becoming a little more grounded \u2014 literally.\u00a0<\/p>\n
\n\tSaks Global cut a deal to sell its Gulfstream Aerospace model G-IV for $6 million, according to a separate court filing.\u00a0<\/p>\n
\n\tA spokesperson for the retailer said: \u201cSaks Global\u2019s leadership has made the decision to sell the company\u2019s legacy plane as it continues prioritizing the disciplined use of capital. This action represents another deliberate step to direct investments toward the areas of the business that will drive meaningful growth for a stronger Saks Global.\u201d<\/p>\n
\n\tThere are, in a sense, two Saks\u2019 that are coming into focus right now.\u00a0<\/p>\n
\n\tOne is the company that was and is still facing a string of unpaid bills, angry vendors and retail dreams that went unfilled. That business is being dissected by the court, creditors and lawyers and will pay out what it can to make good on its broken promises.\u00a0<\/p>\n
\n\tThe other is the \u201cNew Saks.\u201d <\/p>\n
\n\tThat\u2019s how court filings described the holding company or corporation that could be formed to buy Saks Global\u2019s assets out of bankruptcy.\u00a0<\/p>\n
\n\tThat still-theoretical company just received approval to access $500 million more in funding upon exiting bankruptcy and plans to carry on with the luxury retail dream.\u00a0<\/p>\n
\n\tThat version of Saks Global has also worked to rebuild relationships with its key brands and hold on to its best sales people.\u00a0<\/p>\n
\n\tAccording to a declaration last week by chief restructuring officer Mark Weinsten, Saks Global has a workforce of about 16,000 who are needed to keep the business chugging.\u00a0<\/p>\n
\n\t\u201cThe employees are familiar with the global debtors\u2019 businesses, processes and systems and, in certain instances, possess unique skills and experience or have developed and maintain relationships with key vendors and customers,\u201d Weinsten said\u00a0<\/p>\n
\n\tThe top sales people, who accounted for \u201ctens of millions of dollars in sales\u201d last year, are particularly important.\u00a0<\/p>\n
\n\tWeinsten argued to the court that the company should be allowed to pay its top eight sellers bonuses of approximately $260,000 to acknowledge their \u201csignificant contributions.\u201d\u00a0<\/p>\n
\n\tHe said the \u201ctop sellers would not be easily replaced. Recruiting, hiring and training qualified replacements would require significant time and expense, and new hires would lack the established customer relationships and institutional knowledge that make [Saks Global\u2019s] current top sellers so valuable.\u201d<\/p>\n
\n\tSuch bonuses are common as companies move through the bankruptcy process and look to establish themselves anew.\u00a0<\/p>\n
\n\tAnd while the past still has a tight grip on Saks Global, more and more at the company is new.<\/p>\n
#Restructuring #Saks<\/p>\n","protected":false},"excerpt":{"rendered":"
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