Dive Brief:
Saks Global announced Tuesday that it will close eight Saks Fifth Avenue stores located in Birmingham, Alabama; Columbus, Ohio; East Rutherford, New Jersey; New Orleans; Philadelphia; Phoenix; Richmond, Virginia; and Tulsa, Oklahoma. Just one Neiman Marcus location, in Boston, will also shut down.

The luxury retailer — which filed for bankruptcy last month — is also closing 14 Fifth Avenue Club personal styling locations. Two will remain open, and a new location is scheduled to launch in Palm Beach, Florida, this fall.

Additionally, the company is folding its digital home goods brand Horchow into the Neiman Marcus Home e-commerce platform. Last month, Saks Global had already announced plans to close most of its off-price stores.

Dive Insight:
The 2024 merger between Saks Fifth Avenue and Neiman Marcus Group was designed to create operational scale and synergies by combining three of the largest luxury department store names in the United States.

However, as Saks Global Chief Restructuring Officer Mark Weinstein noted in a court filing Tuesday, the consolidation also created immediate challenges. Approximately 40% of Saks and Neiman Marcus stores are located very close to one another — in some cases even anchoring the same shopping malls.

“Given the breadth of luxury retail brands within our portfolio, our stores compete not only with other luxury retailers and e-commerce platforms, but in certain markets, with each other,” Weinstein said. “In light of this landscape, we conducted a comprehensive evaluation of each store’s financial and operational performance to identify the strongest locations within our portfolio.”

Saks Global’s two primary luxury banners compete directly in more than a dozen U.S. markets. As part of the bankruptcy process, eight of the nine store closures will affect the Saks Fifth Avenue brand.

The two Bergdorf Goodman stores in New York City — located across the street from each other — are not impacted by the current closure plan. Likewise, the historic Neiman Marcus store in downtown Dallas, which remained open after intense negotiations with local leaders last year, has been spared in this round.

Still, the outlook remains uncertain. Weinstein told the U.S. Bankruptcy Court for the Southern District of Texas that the company continues to evaluate its store fleet and that additional closures are possible.

“Given the ongoing nature of these evaluations and the need to act swiftly to maximize value from store closings, we believe the Court should allow us to supplement the list of planned closures without requiring additional approval,” he stated.