Saks Fifth Avenue is reportedly getting ready to file a Chapter 11 bankruptcy.
Reports state that the retailer missed $3.2 million USD interest-only debt payments this April for a number of commercial mortgage-backed securities. These securities, a part of $696 million USD in financing for the department store chain, supposedly financed a total of 34 properties, namely 24 Lord & Taylor and 10 Saks stores, the latter’s locations including those in Beverly Hills, Atlanta, Chicago and Miami.
The coronavirus (COVID-19) pandemic has heavily affected the retail sector, with social distancing and self-isolation protocols forcing brick-and-mortar stores to close shop until further notice. This adds to the already growing preference of shoppers to make their purchases online, but now that they are left with no choice, it has only increased pressure in the retail sector.
The news comes after Neiman Marcus filed for bankruptcy in late March 2020. The luxury retailer supposedly spoke to lenders about getting rid of its $4.3 billion USD debt, and a Chapter 11 bankruptcy will aid the retailer to stay in business and devise a recovery plan.
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