Amazon’s business partnership with luxury retailer Saks Global has hit a sour note.
The e-commerce giant invested $475 million of preferred equity in Saks Global — the owner of department stores Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman — in December 2024.
Now, Amazon says its stake is “presumptively worthless,” and it has asked a federal judge to reject the retailer’s bankruptcy financing plans, which it says will further diminish its chances of recovery.
“That equity investment is now presumptively worthless after Saks continuously failed to meet its budgets, burned through hundreds of millions of dollars in less than a year, and ran up additional hundreds of millions of dollars in unpaid invoices owed to its retail partners,” Amazon’s attorneys wrote in a court filing on Wednesday, just hours after Saks Global filed for Chapter 11 with a $1.75 billion financing package.
Amazon said in its motion filed in Texas federal bankruptcy court that it “hopes” Saks will “resolve” its concerns, but warned that it may be forced to “seek more drastic remedies,” including the appointment of an examiner or a trustee.
Amazon invested the $475 million into Saks as the department store giant finalized its acquisition of Neiman Marcus Group in a $2.7 billion deal, according to the court filing.
Amazon said the investment was conditioned on Saks entering into a commercial agreement with Amazon to sell Saks products on Amazon’s website under a “Saks at Amazon” storefront.
Under the agreement, Saks agreed to pay Amazon a referral fee for Saks-branded goods sold on the online platform and guaranteed at least $900 million in payments over eight years to the megacorporation.
Amazon’s attorneys argued the bankruptcy plan would hurt the company and other creditors by loading Saks with additional debt. In court filings, Amazon said the financing would “saddle” Saks with “billions of dollars of obligation for no material benefit” and improperly use the value of Saks Global’s flagship entities to prop up other debtors at the expense of their creditors, including Amazon.
Meanwhile, the federal judge overseeing Saks’ bankruptcy case granted the company approval at a court hearing on Wednesday to tap an initial round of its financing.
Representatives for Saks and Amazon did not immediately respond to requests for comment by Business Insider on Thursday.
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