Saks Off 5th, the discount branch of luxury retailer Saks Fifth Avenue, is shutting down its entire online operation and holding a major clearance sale with discounts up to 90 percent as it prepares to go offline for good. The move follows the parent company, Saks Global’s, Chapter 11 bankruptcy filing on Monday (January 14), and comes after years of financial struggles and mounting debt.
The court-approved shutdown only affects the e-commerce side of Saks Off 5th. The chain’s physical outlet stores, as well as full-line Saks Fifth Avenue locations and their main website, remain open for now, though nine Off 5th stores were already slated for closure in January.
The liquidation was authorized by the U.S. Bankruptcy Court in Houston and is the final chapter for the online-only business, which split from the brick-and-mortar division in 2021. That split was intended to attract tech talent and benefit from the pandemic-driven boom in e-commerce. A $200 million investment from private equity firm Insight Partners did not deliver the expected returns, as high technology and marketing costs continued to outpace revenue.
Shoppers can now find items marked down by as much as 90 percent on the Saks Off 5th website until all inventory is sold and the site is permanently closed. Retail experts say off-price shopping often works better in person than online, which may have contributed to the digital arm’s downfall.
Saks Global’s bankruptcy has also raised concerns about the future of its other luxury banners, including Neiman Marcus and Bergdorf Goodman. The company has secured $1.75 billion in financing to keep stores operating during the restructuring, but analysts warn that more store closures could be ahead as the company works to reduce its debt.
The bankruptcy process is expected to give Saks Global a chance to restructure and address supplier relationships, but experts note that turning the business around will be difficult due to the scale of its financial challenges.
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