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The mood cloaking Saks Global has somewhat lightened up as vendors previously unpaid begin to receive payments for orders shipped. But for Saks it's still a process of rebuilding trust with the market.

It’s almost like vendors and Saks Global have called a truce — whether it’s temporary or permanent remains to be seen, depending on how business progresses.

For the most part speaking on the condition they remain anonymous, small and medium-sized vendors in the U.S. and abroad told WWD that after months or a year or more of not being paid, Saks Global has within the last few weeks started paying for orders shipped. Larger designer brands and fashion conglomerates have consistently been paid.

Saks Global Hits 'Turning Point,' According to CEO Marc Metrick

“I am a little surprised. Last week I got a payment, I wasn’t expecting it,” said one executive from a midsized sportswear company, who was interviewed last week. “Banks are coming in to see me, if they approve the shipments, that would be heaven for me. I feel good that [Saks Global] is paying us, but I also feel I am taking some risk, and trying to forget feeling like the ‘abused wife.’ With banks’ approval of shipments, it would be business as usual with Saks Global. But without getting factored, I would have to put a cap on the amount of my exposure. It’s about doing what you feel comfortable with.”

A representative at one designer company said his company started to receive payments in May for orders that had been shipped in January. None of this company’s bills from 2024 have been paid. But Saks officials have said that it will pay past due bills to its vendors — amounting to about $275 million in total — in monthly installments beginning in July, with outstanding balances projected to be paid in full by the second quarter of 2026.

For now Saks is delivering on its promise to pay vendors 90 days after receipt of goods. Vendors are being paid on a rolling basis, depending on when their merchandise was received, so some are still anxiously awaiting payments. Vendors remain angered by the 90-day schedule, and said it’s practically unheard of in the industry, except during the pandemic when payments were extended.

Along with the commitment to paying vendors, at the end of this month Saks must make its first $120 million interest payment on the $2.2 billion in bonds it sold to buy the Neiman Marcus Group for $2.7 billion last December.

But Saks Global chief executive officer Marc Metrick at the end of May said the company has secured financing commitments to build about $700 million in liquidity. “Along with synergy realization and business performance exceeding our plans, we are well positioned to continue delivering for all of our stakeholders, including our brand partners,” he said, providing assurances to vendors.

On Wednesday, a Saks spokesperson said in a statement to WWD, “We are successfully executing against our previously announced new payment terms. The vast majority of our brand partners have worked with us on our new payment terms, and in addressing any past due balances. Payments are made on a weekly basis and we are focused on building lasting and durable brand partner relationships, enabling their businesses to grow alongside ours.

“With the terms outlined in February, we are setting a new working capital model, more closely aligning payments to our brands to the revenue coming from our customers. This enables us to invest in supporting the growth of the brands through marketing and the personalization work we already have well underway. We estimate that the change in payment terms will drive an incremental net $200 million in working capital efficiency that will be used to support brand partner sales growth,” the spokesperson added.

The spokesperson also indicated that the strategy at Saks Global involves “resetting the business model, reinventing the luxury shopping experience, scaling personalization, unlocking alternative revenue streams, and realizing synergies….We have already made meaningful progress as evidenced by our improving inventory flows, the launch of exciting strategic partnerships like Saks on Amazon Luxury Stores, and the acceleration of our synergy targets.”

Even More Synergies

The spokesperson indicated that Saks Global is “on track to achieve $600 million in synergies over the next five years, reflecting an additional $100 million versus our original target. We expect to realize almost half of that, or over $285 million in run-rate synergies, by the end of fiscal 2025, which is nearly double our original target.”

While clearly relieved that Saks has begun to pay for their orders, vendors need more. They want greater clarity on the game plan for the future — how Saks and Neiman’s are integrating, how the two retailers could differentiate in the context of luxury, whether store closings are in the cards, specifically where Saks and Neiman’s operate in the same markets or malls. Saks and Neiman’s are in eight markets together.

Vendors also voiced concerns about the loss of Saks Global management through consolidating Saks and Neiman’s, and want to know when Saks Global will start to re-animate stores with events and activations. That’s something Neiman’s had been aggressive with through dozens of vendor collaborations that occurred pre-acquisition. Two sources cited Saks’ cancellation of the 2024 holiday laser-light/fireworks extravaganza at the Fifth Avenue flagship as a red flag. One source close to Saks said it cost at least $2 million to stage the holiday display, for the fireworks, light technology, and performers which in past years featured Elton John, Idina Menzel and the Radio City Rockettes.

Saks Global hasn’t been totally devoid of events for its best customers, having hosted at Bergdorf Goodman a cocktail reception to celebrate Valentino Garavani’s “Ses Folies” collection, several jewelry pop-ups with luxury brands at Bergdorf’s and Neiman Marcus stores, and bringing top clients to experience the Cannes Film Festival, among other activities.

“I am concerned that a lot of the leadership is gone,” said the midsized vendor who started seeing some bills paid. “They seem to keep laying off people, for sure with the back offices of Neiman Marcus. And there’s a whole new buying team,” one that’s buying for both Saks and Neiman’s. “I am less pessimistic than I was a month ago, but I wouldn’t say I am overly optimistic either.”

Aware of the concerns, Emily Essner, president and chief commercial officer of Saks Global, and Paolo Riva, chief brand partnerships and buying officer, reporting to Essner, will give a presentation on June 18 to an audience of vendors at the Pitti Immagine Uomo menswear trade show being held in Florence from June 17 to 20. Two other Saks Global officials, Joo Woo, the senior vice president, brand partnerships and buying for men’s, and Bruce Pask, senior director of men’s fashion, will also address the audience. Vendors expect to learn a lot, and receive more assurances. Riva did meet with certain vendors at JCK in Las Vegas, the biggest trade show for jewelry, which was held June 6 to 9.

“They’re lucky they have Paolo on their team,” said the source close to Saks. Before the acquisition, Riva was general manager of brand partnerships and merchandising at NMG.

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