What: S&P places Saks Global's 'CCC-plus' rating on credit watch negative due to liquidity concerns and uncertainty surrounding vendor payments, highlighting challenges in the retailer's post-merger integration with Neiman Marcus.

Why it is important: The credit watch placement highlights how traditional retail mergers face increasing scrutiny in their ability to achieve cost synergies and maintain vendor confidence, particularly significant as Saks Global attempts to reset the multi-brand luxury distribution model.

Saks Global's financial challenges have intensified as S&P places its credit rating under review, citing concerns about the company's liquidity position and its ability to maintain adequate inventory flow. The situation reflects mounting pressure on the recently merged entity, which must address both immediate financial obligations, including a $120 million June interest payment, and longer-term strategic goals.The company's bonds, initially issued at $2.2 billion in December, have declined to trade below 54 cents on the dollar, indicating growing market concerns. This comes as Saks Global implements significant operational changes, including extending vendor payment terms to 90 days for new orders and establishing a 12-month installment plan for past-due balances starting in July.The pressure to achieve $286 million in cost synergies through workforce reductions and supply chain optimisation has added complexity to the company's transformation efforts, particularly as it works to maintain vendor relationships while implementing its technology-driven retail strategy with Amazon and Salesforce partnerships.

IADS Notes: The current challenges follow a series of significant developments in Saks Global's transformation. The December 2024 merger created a $10 billion luxury powerhouse , but by February 2025, the company announced a comprehensive reset of its business model, including a 25% reduction in vendor partnerships . This restructuring coincided with major operational changes, including the closure of key locations and headquarters consolidation . The situation reflects the broader complexities of luxury retail consolidation , where financial pressures must be balanced against the need to maintain strong vendor relationships and operational stability.

Saks Global rated “CCC-plus” by S&P