Saks Files for Bankruptcy, Shuts Most OFF 5TH Locations

As part of its bankruptcy restructuring, Saks is closing the majority of its OFF 5TH stores. Saks Global, which is in charge of Saks Fifth Avenue, Neiman Marcus, Bergdorf Goodman, and Saks OFF 5TH, reportedly had to file for a Chapter 11 bankruptcy due to growing debt and diminishing liquidity.

About 57 of the 74 Saks OFF 5TH locations in the United States are scheduled to close, while about a dozen will stay open in a few states, such as New York, Florida, California, Texas, Georgia, and New Jersey.

The company is now focusing on its flagship luxury stores, such as Saks Fifth Avenue and Neiman Marcus, and prioritizing full-price retail over discount operations.

Saks Global’s new CEO, Geoffroy van Raemdonck, emphasized the company’s strategic direction, stating, “As we advance on Saks Global’s transformation, we are taking decisive steps to realign our business to better serve our luxury customers and drive full-price selling across our core luxury businesses.”

The End of OFF 5TH and Changing Retail Dynamics

For years, Saks OFF 5TH served as a bridge between high-end fashion and budget-conscious shoppers. It offers designer products through both physical stores and an online platform.

However, maintaining its large network of discount stores is no longer possible due to evolving consumer habits, rising operational costs, and the growth of online luxury shopping.

As part of the bankruptcy plan, most OFF 5TH stores are closing, with only a small number remaining open temporarily to sell remaining inventory. The independent OFF 5TH website is also being phased out, marking the end of the brand as a major discount retailer.

This development highlights broader shifts in the business of discount luxury retail, where many high-end brands are increasingly favoring direct-to-consumer channels and controlled retail environments over discount distribution.

Impact on Consumers, Employees, and the Luxury Market

The store closures will have immediate consequences for consumers, who may find fewer options for discounted luxury goods.

This is particularly in suburban shopping centers where OFF 5TH had a strong presence. Discount luxury shoppers are likely to turn to online resale platforms or competing department stores that still maintain off-price offers.

Beyond shoppers, the closures will affect employees. Numerous OFF 5TH stores served as hosts in mid-tier malls, and their exits worsen issues in physical retail spaces that were already dealing with empty spaces and dwindling customer traffic.

Saks Global’s long-term success will depend on rebuilding supplier relationships, managing debt prudently, and offering interesting full-price luxury experiences. The closure of OFF 5TH reflects broader structural changes in the production, distribution, and consumption of luxury fashion.

More than a single company’s setback, Saks Global’s bankruptcy serves as a cautionary example for legacy retailers adapting to a rapidly evolving market.