Saks Global, the corporate owner behind the discount retail formats Saks Off 5th and Last Call, has announced a significant contraction of its discount store footprint as part of a strategy to prioritize its luxury retail operations. This move follows the company’s bankruptcy filing earlier this month, signaling a reorganizational effort to stabilize its financial position.
On Thursday, Saks Global disclosed plans to close nearly 60 Saks Off 5th stores and five Last Call outlets across the country. Despite these closures, approximately twelve Saks Off 5th stores will continue operating, serving a newly defined role in the company's broader retail strategy.
This reorientation directs focus firmly toward the high-end merchandise offered by Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman, all prestigious luxury retail divisions within the company's portfolio. The pivot marks a considerable shift away from the discount market segment where Saks Global’s Off 5th and Last Call brands operate.
The financial distress that precipitated this change is linked in part to the burden of heavy debt accumulated during Saks Global’s 2024 acquisition of Neiman Marcus, a move which compounded already existing vulnerabilities. Prior to the acquisition, the company had been experiencing financial instability, suggesting structural issues that have persisted despite efforts to consolidate luxury retail assets.
In a statement issued alongside the closure announcement, Saks Global clarified the future role for the remaining Saks Off 5th outlets. These stores are intended mainly to act as sales channels for residual inventory originating from the luxury lines of Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman rather than serving as primary points of merchandise procurement. This strategic adjustment includes a cessation of direct merchandise purchasing for the Saks Off 5th brand.
Changing consumer behaviors have further impacted the company’s performance in discount luxury retail. The appetite for luxury shopping has shifted, with consumers demonstrating growing skepticism toward purchasing luxury items via department store intermediaries. Instead, there is a discernible trend among luxury shoppers to buy directly from brand-owned outlets or official channels, thereby bypassing traditional department stores like those operated by Saks Global. This evolving dynamic has intensified the financial pressures on the company, compounding the challenges linked to its debt load.
To prepare for the upcoming closures, Saks Global has scheduled closing sales to begin on January 31 for selected Saks Off 5th stores, as well as for all Last Call locations. Additionally, the Saks Off 5th e-commerce platform will launch its clearance sales starting January 30, affording customers online access to discounted merchandise as part of the shutdown process.
Customers holding Saks Off 5th gift cards should note that the redemption period will conclude on specific dates: February 14 for in-store transactions and February 13 for online purchases, as stated on the company’s website. After these dates, gift cards will no longer be accepted, marking a definitive end to transactional activity within the discontinuing discount retail network.
This contraction and strategic refocus by Saks Global indicate a deliberate withdrawal from broader discount retail landscapes to concentrate efforts and resources on their established luxury retail brands. The company’s intention appears to be to stabilize operations by doubling down on sectors demonstrating stronger consumer demand and potentially improved profit margins amid ongoing financial restructuring.