Key Takeaways:
What is unfolding at Saks Global has felt inevitable for those who have been paying attention. Long before the luxury retailer filed for Chapter 11 bankruptcy protection in January, the warning signs were flashing as bright as the Saks Fifth Avenue holiday light show: delayed vendor payments, workforce reductions, the closure of its 45-year-old San Francisco flagship, and a sweeping assortment reset that cut an estimated 500-600 brands all signaled a slow but sure decline for the once-iconic retailer.
On paper, luxury brands that include Chanel, Estée Lauder, LVMH, Kering, and Puig are among the vendors most exposed in Saks Global's bankruptcy. Chanel, in particular, is owed a staggering $136 million, while the others have significant claims ranging from $59.9 million down to $12.1 million. Large companies like these can survive such losses, as large as they may be. Smaller, independent beauty brands won’t be so lucky.
Saks Global’s troubles follow the earlier collapses of three New York retail institutions: Barneys New York, Henri Bendel, and Lord & Taylor. Each closure narrowed the number of viable doors for emerging and independent brands.
By the time Saks Global started to show signs of distress, independent beauty brands, particularly those in the luxury category, didn’t have many places to turn. Saks Global (which owns Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman, as well as off-price stores Neiman Marcus Last Call and Saks Off 5th, and home furnishings website Horchow) operates all but a few of the remaining luxury department stores in the US.
As the slow bleed of Saks Global continues, small, independent beauty brands are the ones facing the biggest threat. The compounding effect of unpaid invoices, trapped inventory, and shifting payment terms can sink a small brand seemingly overnight. At the same time, it’s impossible to set aside the benefits that can come from landing a coveted spot in a luxury retail store. For years, Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman played a critical role in nurturing emerging beauty brands, providing discovery and credibility to brands such as Byredo and Knesko Skin.
Now, indie beauty brands at Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman are being forced to reassess their exposure and decide whether they should stay or seek distribution elsewhere. Staying offers long-term potential upside, while exiting may protect short-term survival. BeautyMatter spoke with retail experts to understand how Saks Global’s bankruptcy is altering the economics of luxury distribution for independent brands.
The Warning Signs
The writing was on the wall long before Saks Global declared bankruptcy, but some sources we spoke to say that the beginning of the end started last fall with a significant operational disruption. As part of Saks Global’s consolidation, the company moved to merge three separate systems (Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman) onto a single platform in early fall 2025—right before the busiest quarter of the year for luxury retail. The transition, according to industry sources, was anything but smooth.
"Orders were delayed, and some brands reverted back to prior vendor accounts, which led to the inability to place new orders, out-of-stocks, and widespread business disruption," said Crystal Wood, a beauty industry marketing and operations expert.
In some cases, brands that had recently changed distributors were forced to revert to their previous distributors, and soon after, orders couldn’t be processed at all.
“For brands that had been doing good business, these system issues brought many of their positive trends to a halt,” Wood added.
Internal reorganizations and staffing gaps across Saks Global compounded the chaos. Buyers were reassigned, new teams were brought in, and decision-makers were temporarily unavailable, creating further delays and confusion. Even internal teams at Saks Global struggled to access basic reports.
The segmentation of systems also obscured the true scope of nonpayment. Sources told BeautyMatter that brands selling through Neiman Marcus were largely up to date on their invoices until around last November, while those doing business with Saks had been contending with unpaid invoices for much longer.
Leilah Mundt, founder and CEO of Crème Collective, a business services agency focused on sales and marketing, said early warning signs had been building for at least two years. Months before, as payment delays across Saks Global emerged, Crème Collective advised brands to confront the risk head-on.
“We have very real conversations [with brands] about whether [they were] okay never being paid for that order,” Mundt said.
Some brands were willing to take that risk to be seen in luxury retailers. “It's good visibility, so in that way, it's sort of like a marketing channel,” Mundt explained. “Other times, it's debilitating financially. It really just depends on the brand, their distribution, and how much it weighs on that one relationship.”
Adding another layer of strain was the fact that payment terms tightened following Saks Global’s acquisition of Neiman Marcus and Bergdorf Goodman in December 2024. What had once been net 30 terms, designed to nurture emerging brands, shifted to net 90, fundamentally changing cash-flow math for indie businesses, many of which were already facing rising costs of goods across all elements of their operations.
“For an indie brand, the hardest part is cash management,” Wood said. “You’re being squeezed from both sides—costs are rising, and you’re either not getting paid or getting paid 60 days later than you planned.”
This forced brands into an impossible position: either continue shipping new orders, even as unpaid invoices kept piling up, not knowing when or if they would be paid, or stop shipping altogether. Many brands chose the latter, creating inventory gaps and empty shelves, and compounding the cash crunch at Saks Global.
The Decline of Department Stores
Luxury-priced beauty brands have limited brick-and-mortar distribution opportunities in the US, and for many, these retailers were often their only meaningful points of national exposure. But even at their best, traditional department stores have struggled to adapt to the evolving demands of the luxury beauty market.
“The reality is that department stores have all started to look alike: they all have the same assortment, and they all carry the same brands,” said Sonia Summers, founder and CEO of Beauty Barrage, a retail activation and field sales agency. “They stopped paying attention to the customer. They weren’t giving them the types of customer service that you look for when you’re buying luxury.… There’s no premium service.”
Maggie Ciafardini, a global beauty industry executive specializing in sales growth and distribution strategy in high-end retail, echoed Summers’ sentiments around the decline of department store service.
“People today have been trained to mostly shop online, because when they do go into the store, [the sales associates] tell them to go online because they don't have the product in the store,” Ciafardini told BeautyMatter. “It makes you wonder, ‘Why did I come all the way over here just to be told to shop online?’”
Beyond the obvious inventory gaps, Mundt pointed to structural flaws in how department stores have historically operated their cosmetics floors. “You have too many people chasing too little foot traffic, and it’s a very dated model.”
This stagnation, Mundt argues, partly explains why traditional department stores struggle to attract and engage younger generations, who tend to favor specialized, smaller-footprint retailers or online shopping.
“[Saks and Neiman Marcus] were so luxury that they attracted one generation that just kept aging, and then they struggled to bring in anyone new."
Beauty Brands Face a Difficult Decision: Should They Stay or Go?
So, what happens now? Brands have to decide if they want to stick around and see how Chapter 11 bankruptcy protection plays out for Saks Global. Chapter 11 bankruptcy protection is a court-supervised process that gives the retailer time to restructure its debt or pursue a sale while continuing operations. According to filings in the U.S. Bankruptcy Court in Houston, the company’s assets and liabilities each range from $1 billion to $10 billion.
Sources tell BeautyMatter that YSL Beauty, Armani Beauty, Kiehls, Lancôme, Oribe, and Mason Pearson have pulled out of Saks Global. Irene Forte Skincare and Furtuna Skin have also exited the retailer. Victoria Beckham Beauty is currently in negotiations with the retailer on whether it will continue a relationship with Saks Global.
Ogee, a luxury organic skincare and makeup brand, is no longer actively shipping to Saks Fifth Avenue and is currently selling through remaining inventory within their warehouse.
“We are truly saddened to witness this chapter for such an iconic retailer,” Taylor Audette, Vice President of Brand Marketing at Ogee, told BeautyMatter. “Our thoughts are with the dedicated teams and individuals whose hard work and passion shaped Saks and who may be impacted by this outcome.”
Meanwhile, some brands under The Estée Lauder Companies Inc., including La Mer and Kilian, paused shipments in January post–Chapter 11 announcement, only to restart in late February. In fragrance, brands including Marc-Antoine Barrois, Parfums de Marly, Loewe Fragrances, and Maison Francis Kurkdjian are continuing their relationships with the retailer.
“The bigger luxury brands have a financial advantage because they have other points of distribution, their own freestanding boutiques, and often other brands within their portfolio that can help them ride out this challenging moment in time,” Wood told BeautyMatter. “But there are brands of all sizes that are continuing to do business [with Saks] and brands that are still interested in entering the Saks Global ecosystem, as that is where the premium luxury consumer goes to buy beauty, clothes, shoes, and gifts.”
Heritage skincare brand Borghese launched online at Neiman Marcus in 2025, and unlike many indie brands, managed to avoid the mountain of unpaid invoices thanks to Chief Operating Officer Dawn Hilarczyk’s foresight. Based on her previous experience working with a major luxury retailer, Hilarczyk negotiated strict payment protections into Borghese’s contract.
“For us to ship, we have to get paid,” she told BeautyMatter.
That clause insulated Borghese from the invoice pileups impacting other beauty brands. Borghese will remain online at Neiman Marcus but has dramatically shifted its investment strategy.
“We’ve pivoted our time and financial resources toward other opportunities that are picking up momentum,” said Hilarczyk.
Borghese has been focused on diversification since Hilarczyk joined in 2024, and it’s a strategy that has worked in the brand’s favor. Borghese’s DTC website grew 38% in 2025, and the brand is also seeing great performance on Amazon. On the retailer front, Macy’s is now Borghese’s #1 retail partner and second-largest channel overall. The brand launched in 25 Macy’s doors in January. Bloomingdale’s also continues to deliver steady growth.
Borghese is one of the lucky ones and remains unscathed, but Hilarczyk still fears the consequences of what this will mean for her fellow beauty industry peers.
“What people are afraid to talk about is that this bankruptcy is literally putting people out of business,” Hilarczyk added. “There are founders who put up their homes and personal capital. If you don’t pay their purchase order for three months, they can’t pay their teams.”
How Beauty Moves Forward
In January, the luxury retailer secured $1.75 billion in new financing from senior secured bondholders and asset-based lenders, providing near-term liquidity to support ongoing operations and payments to brand partners. All stores and e-commerce operations remain open, and the company expects to emerge from bankruptcy later this year under new leadership.
“This is a defining moment for Saks Global, and the path ahead presents a meaningful opportunity to strengthen the foundation of our business and position it for the future," said newly appointed Saks Global CEO Geoffroy van Raemdonck in a press release. Van Raemdonck previously served as CEO of Neiman Marcus Group prior to its acquisition by Saks Global in 2024.
“In close partnership with these newly appointed leaders and our colleagues across the organization, we will navigate this process together with a continued focus on serving our customers and luxury brands.”
It’s unlikely that all brands exposed in Saks Global’s bankruptcy will ever be repaid in full. Sources we spoke to suggested brands engage legal counsel to understand their position in the creditor hierarchy and assess the likelihood of recovery. In the meantime, brands can limit further damage by identifying recoverable inventory, evaluating which receivables may need to be written off, and taking steps to reduce additional exposure, including answering the big question: Should the brand stay with Saks Global or look elsewhere for distribution?
"Now is a time for indie brands to really think about whether the cost to serve and the long game. Can they afford to do business [with Saks Global] with the new payment terms combined with the brand production costs? Also, they have to be really clear on how much it costs to get a bottle out the door,” said Wood. “This will be a time where the indie brands need to do their due diligence and really sit down and ... let the data guide their decisions."
According to Wood, this could be a great opportunity for a growing independent beauty brand to enter these luxury retailers, which have strong loyalty through their credit card rewards programs.
"Their loyalty point events and promotions are massive, similar to Nordstrom’s Anniversary Sale, which is bigger than Christmas for the retailer,” she explained. “These moments drive significant beauty volume, and many customers continue shopping there because there isn’t another place where they can buy beauty alongside clothing, shoes, and accessories all at once."
Hilarczyk’s recommendation to beauty founders is blunt: diversify or die. “If you put all your eggs in one basket, you may lose your company,” she said.
She believes traditional purchase order-driven wholesale models are increasingly untenable in luxury beauty. Instead, she predicts a shift toward dropship, consignment, and marketplace strategies.
“It’s better to ship on demand and get paid on demand than build inventory upfront and hope you get paid,” she said. “Retailers don’t have the capital to hold all that inventory anymore.”
According to Mundt, Saks Global generates relatively low beauty volume and has historically struggled to scale the category. As a result, she advises brands to treat luxury department stores as a small, strategic component of their distribution mix rather than the primary driver of growth. Beyond Ulta Beauty and Sephora, there are thousands of distribution points that can help brands grow, including spas, resorts, med spas, and more. A layered approach to distribution is much healthier in the long term for brands, Mundt argued.
“It’s like building a financial portfolio—if one channel struggles, you still have others to rely on,” she said. “From a brand perspective, Saks in particular should never have been such a large part of a distribution strategy, because you never want all your eggs in one basket…. If you're relying on any one particular store, you're in trouble.”
Mundt and other sources emphasized that the current moment underscores the importance of owned channels, particularly DTC and TikTok Shop. Acquiring and nurturing a digital audience is key for any brand, including luxury brands. Ciafardini also encouraged luxury brands to set aside any preconceived notions about being on a platform like TikTok Shop.
"If I see an $80 lip product that gets rid of lines … I don't care where I'm seeing it,” she said. “I think the brand is more sensitive than the customers. The customer doesn't care. They just want to know that the product works.”
While independent beauty retailers like Credo, Bluemercury, and Violet Grey have smaller retail footprints than Saks Global, they also offer strong positioning for any luxury brand and solid support from their store teams, which is crucial for driving in-store conversions.
“People shop with people they like,” said Ciafardini. “It has nothing to do with selling and everything to do with making a customer feel welcome and more comfortable. More training needs to focus on delivering that level of customer service.”
Mundt added that luxury brands are in a relatively advantaged position regarding distribution choices, but must remain realistic about how younger consumers shop. Exclusivity may have been closely associated with luxury in the past, but today, luxury is more accessible than ever before. While scarcity still remains a driver, the definition of luxury is evolving to include elements of authenticity and emotional connection.
“Anyone younger than Gen X has grown up buying beauty at Sephora, Ulta, or Amazon,” Mundt said. “Luxury brands have to meet that customer where she already is.”
For luxury department stores to remain relevant, both to consumers and to the brands that rely on them, Summers said that they need a hard reset, starting with a renewed focus on customers. When executed well, experiential retail can bring people into stores and foster connections among those customers, brands, and retailers. Pop-ups, co-branded events, or shop-in-shops could attract new customers.
“[Luxury retail] needs to re-engage with the customer,” another source said. “They need to look at what’s worked for them in the past and build events around that.”
The Future of Luxury Beauty
Sources we spoke to emphasized that Saks Global’s bankruptcy should not be read as a referendum on the health of the luxury market itself. While the near-term environment remains challenging for luxury beauty, sources expressed cautious optimism that conditions will stabilize in the coming months as the restructuring gets underway.
“Luxury is always going to be aspirational,” said Ciafardini. “It was never the moneymaker—it’s the point of entry, and everything else flows from there.”
Longer-term confidence in the category remains intact, even as the landscape continues to shift.
“Luxury beauty will survive. We will survive, and we will thrive,” Ciafardini added. “The landscape will look very different five years from now, but people are still going to want to shop and feel good about how they look.”
The “death of the department store” narrative is overstated, according to Mundt, though elements of it ring true as it relates to how today’s consumers discover and purchase beauty.
“Department stores do need to stay on top of it with beauty,” she warned. “Beauty has transformed in the last few decades, and it's a completely different industry. There's a completely different set of brands, and the consumer is different. Multiple generations are shopping differently, so they just need to keep up.”
Summers was largely dismissive of the idea that Saks Global’s bankruptcy marked the end of luxury beauty in department stores. “Saks is a legacy brand: if they come out of this focused on curation, customer attention, and experience, there’s still a real opportunity,” she said.
“I always look at it like this: department stores are big cruise ships that are slow and hard to turn, and all the other [beauty retailers] are the modern, gorgeous yachts that are faster to adapt and not afraid to try new things.”
