By Suzanne Kapner and Becky Yerak
Saks Global's fall into bankruptcy has imperiled one of Amazon's most ambitious ventures into luxury retail, leaving behind plenty of bad blood between the two partners.
Saks Fifth Avenue and Amazon joined forces in December 2024 as part of the luxury retailer's acquisition of rival Neiman Marcus. Saks needed money for the deal, and Amazon -- which had long tried to crack the code of selling luxury goods online -- invested $475 million in the retailer. The investment was conditional on Saks selling merchandise on Amazon's website, according to a court filing.
Now, the partnership is the latest casualty in the collapse of Saks Global, which filed for bankruptcy protection on Wednesday. It is yet another setback for Amazon in its decadeslong quest to attract high-end brands and shoppers to its digital platforms.
In a bankruptcy hearing that tipped into early Thursday morning, Amazon unsuccessfully tried to block Saks's access to some of the $1.75 billion in financing the department-store chain had arranged from lenders to see it through a restructuring and beyond.
Amazon claimed, among other things, that Saks had breached their deal, which included selling luxury products on the online giant's website. In the filing, Amazon said its "equity investment is now presumptively worthless after Saks continuously failed to meet its budgets, burned through hundreds of millions of dollars in less than a year, and ran up additional hundreds of millions of dollars in unpaid invoices owed to its retail partners."
Amazon noted that a Saks entity that owns the retailer's flagship Fifth Avenue store has pledged its equity to support the bankruptcy financing. Amazon has said the financing would burden that entity with too much debt at the expense of unsecured creditors like itself.
U.S. Bankruptcy Judge Alfredo Perez was unmoved by the arguments made by Amazon and other unsecured creditors and gave Saks immediate access to at least $400 million.
The acrimony now spilling out in the court filings is a U-turn in a relationship forged over nearly a decade.
Before joining forces in 2024, Saks and Amazon had been talking for years about how they could work together, according to people familiar with the situation. When Saks was closing in on its $2.7 billion Neiman Marcus acquisition, a blueprint took shape: Amazon would invest equity in the deal, which closed in December 2024, and Saks would serve as a beachhead for Amazon in its efforts to establish its luxury footing.
In April, the companies unveiled, "Saks on Amazon," which they described as a new, curated experience to sell luxury goods on the online retailer's site. Dolce & Gabbana, Balmain, Etro and Stella McCartney are among the brands showcased in a Saks Fifth Avenue storefront within Amazon's Luxury Stores section, which it started in 2020 to showcase higher-end goods.
Amazon's efforts to break into the luxury world go back more than a decade. In 2012, it sponsored the Metropolitan Museum of Art's annual gala, known as the Costume Institute Benefit, which attracts top-tier designers and celebrities. Amazon founder Jeff Bezos and his wife, Lauren Sanchez, are the sponsors of the 2026 gala, to be held in May.
In 2020, an Amazon Original series, "Making The Cut," hosted and executive-produced by Heidi Klum and Tim Gunn of "Project Runway" fame, made its debut. For three seasons, it featured fashion designers who had to complete assignments and were judged by panelists that included Naomi Campbell and Nicole Richie.
That same year, Amazon launched Luxury Stores, which it called "a new shopping experience offering both established and emerging luxury fashion and beauty brands." It made its debut with designer Oscar de la Renta, whose $3,000 gowns and $1,700 handbags were featured on their own Amazon storefront. Other designers, including Lanvin and Altuzarra later signed on. But many of the largest luxury brands including Louis Vuitton and Gucci still refuse to do business with Amazon.
"Customers have a strong appetite to shop for luxury products in our store, and we're investing and innovating to meet that demand," an Amazon spokeswoman said.
The Saks deal was a breakthrough of sorts for Amazon. Saks's storefront offered the curation and feel of Saks's own digital platforms. Situated inside Amazon's Luxury Stores section, it was almost as if Saks was anchoring the luxury wing of a digital mall.
Saks owned the inventory and handled the back-end, packing and shipping the items to customers using Amazon Prime logistics. And like other Amazon sellers, it paid a fee to the online retailer, guaranteed to be at least $900 million over eight years, according to the court papers.
By the summer, Saks on Amazon had grown but still had less than $100 million in sales, according to people familiar with the venture. There were promising signs: A fifth of customers came back after 30 days and shopped again, a healthy rate of repeat business by industry standards.
Another positive was that Saks's return rate for goods sold on Amazon was about half that of items sold on its own digital platforms, one of the people said. The Amazon customers also tended to be younger than Saks's shoppers.
Still, the venture had trouble attracting an array of big brands that typically draw shoppers. Marc Metrick, the former CEO of Saks Global, who stepped down earlier this month, told "Women's Wear Daily" in November that it had been challenging to get more brands onto the storefront.
In the months preceding its filing, Saks executives reached out to Amazon about providing financing or even buying the company outright, according to one of the people. No deal materialized.
Now, with Saks under court protection, the future of the Saks-Amazon tie-up -- like much else for the company -- is uncertain.
Write to Suzanne Kapner at suzanne.kapner@wsj.com and Becky Yerak at becky.yerak@wsj.com
(END) Dow Jones Newswires
January 16, 2026 14:40 ET (19:40 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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