Amazon says Saks investment is worthless after bankruptcy

Amazon Challenges Saks Global’s Bankruptcy Financing Plan

Amazon is urging a federal judge to reject Saks Global’s proposed bankruptcy financing plan, citing the department store’s failure to meet its financial obligations. In court papers filed on Wednesday, Amazon’s attorneys argued that Saks “burned through hundreds of millions of dollars in less than a year” and failed to uphold its agreement with the tech giant.

As part of its investment in Saks, Amazon had agreed to provide technology and logistics expertise in exchange for a significant stake in the company. However, Amazon now claims that its $475 million investment is “presumptively worthless” due to Saks’ poor financial management. The company had acquired Neiman Marcus for $2.7 billion in December 2024, with Amazon investing in the venture on the condition that Saks would start selling its products on Amazon’s website.

Bankruptcy Filing and Financing Plan

Saks filed for Chapter 11 bankruptcy protection on Wednesday, just hours after Amazon submitted its court filing. As part of its bankruptcy plan, Saks is seeking to access $1.75 billion in new financing, which Amazon argues would harm the company and other creditors. Amazon claims that the plan would saddle parts of the Saks corporation with new debt and push Amazon further down the list of creditors, reducing the amount it could potentially recover during the bankruptcy proceedings.

During a hearing on Wednesday, U.S. Bankruptcy Court Judge Alfredo Perez allowed Saks to start tapping into the new financing, but has yet to rule on Amazon’s request to reject the plan. Amazon has stated that it “hopes” Saks will address its concerns, but may seek “more drastic remedies” if necessary, including the appointment of an examiner or trustee.

Investment and Partnership

Amazon’s investment in Saks was part of a larger deal that saw the tech giant guarantee a minimum of $900 million in payments to Saks over eight years. The partnership also involved the launch of a “Saks at Amazon” storefront on the e-commerce platform, featuring a range of luxury fashion and beauty items. However, Amazon now claims that Saks failed to meet its budgets and ran up significant unpaid invoices owed to its retail partners.

The Saks deal was seen as an opportunity for Amazon to expand its presence in physical retail and grow its luxury selection. The company has experimented with various concepts over the years, including investments in other retailers and technology companies. Salesforce, another tech giant, also took a minority stake in Saks during its acquisition of Neiman Marcus, although it is unclear if the company plans to object to the bankruptcy plan.