Saks OFF 5TH Slashes Store Footprint, Closing Dozens of Outlets in Bankruptcy Restructuring
The ripple effects of the ongoing luxury retail consolidation have reached a critical point for bargain hunters. Saks Global, the entity formed after the merger of Saks Fifth Avenue and Neiman Marcus, announced a sweeping reduction of its off-price footprint on Thursday.
As part of its bankruptcy restructuring, the company confirmed it will close 57 of its 69 Saks OFF 5TH stores across the United States. The remaining 12 locations will stay open. In a parallel move, all five remaining Neiman Marcus Last Call stores will also be shuttered. The separate entity operating the Saksoff5th.com e-commerce site will wind down operations.
"This decisive action allows us to streamline our portfolio and sharpen our focus on our core, full-price luxury business," a company spokesperson stated, though they declined to specify the number of jobs affected by the closures.
Saks Global filed for Chapter 11 bankruptcy protection in mid-January, a strategic step to manage over $2.5 billion in debt largely stemming from its 2024 acquisition of rival Neiman Marcus. The company's challenges are emblematic of a sector under prolonged pressure. The decades-long decline of traditional department stores and malls, accelerated by the rise of e-commerce, has been compounded by a recent cooling in the luxury market. A post-pandemic spending surge faded in 2023, dampened by shifting priorities among younger consumers and wavering demand from key international shoppers.
The closure process begins imminently. Twenty-three OFF 5TH stores will close this Friday, February 2nd. The remaining 34 locations will launch final clearance sales this Saturday before closing their doors in the following weeks. The surviving dozen stores are located in key markets including New York, Florida, California, Texas, New Jersey, and Georgia.
What This Means for Shoppers and the Market
The drastic pullback signals a strategic pivot away from the competitive off-price luxury segment, where margins are thinner and competition from players like TJX Companies' Saks OFF 5TH rival, Nordstrom Rack, is intense. Analysts suggest this move is a necessary, if painful, contraction to preserve the prestige of Saks' and Neiman Marcus's primary full-price brands.
Voices from the Aisle
"As a longtime manager in retail, this is heartbreaking but not surprising. The debt load from that merger was a ticking time bomb. My heart goes out to the employees who built their careers in these stores." – Michael Torres, former regional retail director.
"It's a bloodbath for mid-tier malls. These anchor stores brought in consistent foot traffic. Their closure will create massive vacancies that will be incredibly difficult to fill in today's retail climate." – David Chen, commercial real estate analyst.
"Absolute corporate malpractice. They loaded up on debt to create a giant, then immediately strangled the more accessible part of the business that regular people actually shopped at. It's a betrayal of loyal customers and employees alike, all to service bad financial decisions made in a boardroom." – Sarah Jennings, consumer advocate and retail blogger.
"From an investment perspective, this is a harsh but rational triage. The off-price model diluted their luxury aura. Focusing on their high-margin, full-price flagships is the only viable path to long-term stability, even if it means a much smaller physical presence." – Priya Sharma, portfolio manager at Crestline Capital.
This report includes original analysis and commentary. Initial news of the closures was reported by NBC News.