Saks Fifth Avenue faces creditor, vendor unease

Zenobia Taylor-Braun had high hopes in 2021 when she started selling her artisanal jams to Saks Off 5th, the off-price sister brand to Saks Fifth Avenue. For a small-business owner like her, access to the luxury retailer's stores seemed like a prestigious step forward.

- DANIELLE KAYE

But Taylor-Braun’s excitement soon gave way to frustration about missed payments. She was forced to hound Saks to pay its invoices, she said, and when she finally received payment, six to eight months later, it was often less than what she was owed.

“We were sold a lot of empty promises,” said Taylor-Braun, who runs Cellar Door Preserves, based in Grand Rapids, Michigan.

She severed ties with Saks last year and wrote off hundreds of dollars in losses. “It would take quite a bit of convincing for me to ever work with them again,” she said.

The Saks brand’s ailing relationship with vendors, a problem years in the making, is one of the many challenges shadowing the company as it tries to shore up its finances, reestablish trust with suppliers and convince investors and consumers that a $2.7 billion deal to buy a longtime rival was worthwhile.

Six months after Saks acquired Neiman Marcus, the combined company — Saks Global — is trying to assure bondholders that the tie-up they helped fund puts the luxury giant on firmer financial footing.

The latest test came Monday, the due date for an initial $120 million interest payment to creditors, tied to a $2.2 billion, five-year bond issue that Saks used to finance the Neiman Marcus deal. Saks made the payment on time, according to a source close to the company, despite jitters among some investors leading up to the deadline.