Saks Global is facing mounting financial and operational challenges as vendor payment issues continue to disrupt its business and weigh on sales.
The luxury retailer reported second-quarter revenue of $1.6 billion, down more than 13% year over year and below company expectations.
Gross merchandise value slipped to $2 billion from $2.1 billion a year earlier, while net loss widened by over 6% to $288 million.
CEO Marc Metrick attributed the weaker results to “inventory challenges” that have persisted into the current quarter. Ending inventories stood at $1.9 billion, down from $2.1 billion in the prior quarter. Gross margin contracted by 20 basis points to 37.9%, impacted by shifts in sales mix, markdowns, and promotional costs, despite stronger full-price selling.
Industry analysts said Saks Global’s latest results underscore what they have warned about for months — that the company’s strained vendor relationships and inventory integration issues would inevitably hit sales and profitability.
The friction with suppliers first surfaced earlier this year when Metrick sent a memo to vendors acknowledging a payment backlog and outlining revised payment terms.
Despite assurances that the situation had improved, some vendors recently told Retail Dive that past-due invoices remain unpaid and that certain brands have stopped shipping to Saks Fifth Avenue and Neiman Marcus.
In its earnings release, Saks Global said the refinancing helped it “meaningfully reduce vendor payment plan balances” but acknowledged that merchandise shortfalls were hampering sales performance.
“Trends within our business demonstrate that when merchandise is present, topline performance improves,” the company said. “Our concession business continues to reflect strong demand from the luxury consumer, and in our wholesale business, categories with consistent inventory perform well.”
The company’s integration of Neiman Marcus and Saks Fifth Avenue operations following its $2.7 billion acquisition of Neiman Marcus Group in December further compounded its inventory problems.
Saks said a “one-time interruption” during systems integration in August temporarily delayed product flow, though it has now transitioned to a unified merchandising and inventory management platform — a “key milestone” in its restructuring.
Saks Global said inventory receipts began to rebound in September and will continue to normalize through the holiday season and into 2026.
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