Saks Global Enterprises, the cash-strapped retailer, skipped an curiosity fee to bondholders totaling greater than $100 million that was due Tuesday because it seems to barter a cope with collectors, in response to folks conversant in the state of affairs.
The luxurious department-store chain is now working underneath a grace interval amid restructuring talks, mentioned the folks, who requested to not be recognized discussing a non-public matter.
A consultant for Saks, which is predicated in New York, declined to remark, as did PJT Partners, which is advising the corporate.
Saks has been weighing choices to shore up liquidity, together with elevating emergency financing or promoting belongings. It was additionally contemplating Chapter 11 chapter as a final resort, separate folks acquainted mentioned final week. Some collectors have been holding talks to evaluate the corporate’s money wants, which can embrace offering it with a possible debtor-in-possession mortgage, a type of chapter funding.
The firm, whose roots return greater than 150 years, raised billions of {dollars} from bond buyers final 12 months to pay for a turnaround plan that concerned buying Neiman Marcus. In October, nevertheless, it minimize its full-year steering after reporting declining gross sales tied to inventory-management challenges.
The chain operates its flagship Saks Fifth Avenue shops together with Bergdorf Goodman and Neiman Marcus. It reported a 13 p.c year-over-year drop in income to $1.6 billion within the second quarter. At the time, administration mentioned it’s been exploring the sale of a minority stake in division retailer Bergdorf Goodman to boost funds.
The firm restructured its $2.2 billion debt load earlier this 12 months, and it has seen its bonds fall sharply in latest weeks forward of a potential debt restructuring.
By Reshmi Basu and Eliza Ronalds-Hannon
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