Saks Global Hires Advisers as It Works to Shore Up Liquidity
Saks Global, which told bondholders two weeks ago that it was looking at options to shore up its balance sheet, has brought some heavy-hitting advisers on board to help with the process.
Sources told WWD that the Saks and Neiman Marcus parent is working with financial advisers at Bank of America and PJT Partners as well as legal experts at Willkie Farr & Gallagher and Kirkland & Ellis.
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Bank of America declined to comment and none of the parties immediately replied to a WWD query on Monday.
While PJT and Kirkland are known for their expertise in helping companies navigate distressed situations, sources said Saks is looking to tap into the capital markets and strengthen its liquidity and is not working with the teams that handle other situations, like bankruptcies.
The idea is to explore the company's different options and to beef up the balance sheet in 'an efficient manner' and not with a 'hair on fire process,' said one personal familiar with the effort.
'There's money around the edges' that can be tapped into, said the source, adding that every option was being looked at.
Executive chairman Richard Baker and chief executive officer Marc Metrick have been working on a high-wire transformation at Saks — from integrating Neiman's and launching a storefront on Amazon to extending payment terms on vendors and smoothing out the finances.
While that already seemed an ambitious undertaking when the company sold $2.2 billion in bonds to close the $2.7 billion Neiman's acquisition in December, it is now all the harder in a world scrambled by the Trump administration's on again, off again tariffs.
The trade war, the attendant macro uncertainty and the roller-coaster market have especially pressured companies like Saks that are working through a transition.
The company is said to still have liquidity of nearly $400 million, as it did when it updated bondholders late last month, and is positioned to make its $120 million interest payment on the bonds next month.
But keeping bondholders calm has been a job.
While the debt was trading at 97 cents on the dollar at the start of the year, it was going for about 60 cents on the dollar on Monday — a sharp decline for bonds just six months old.
Metrick previously told bondholders that the company was working on a $300 million FILO facility that could be tapped quickly and would not add to the debt load as it would be carved out of the existing $1.8 billion asset-backed loan.
Work on that is said to be coming along while the new advisers are also helping the Saks explore other options — including the potential sale of some of its $3.5 billion real estate portfolio or a sale-leaseback transaction or tapping into the value of noncore businesses.
That would have Saks, which turned to vendors to help it through lean times in the past, digging into its own piggy bank to keep the business moving forward.
Sources said the retailer plans to stick to its new 90-day payment terms with vendors while beginning to pay past-due bills to brands in July, as previously laid out.
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