Latest / INSIGHT TODAY / Saks exits bankruptcy with $500M financing and luxury-focused pivot

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Saks exits bankruptcy with $500M financing and luxury-focused pivot · INSIGHT TODAY

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  Speaker 1: Today's top searches are only part of the story. A
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  Speaker 1: simple scroll can sometimes take you down that deep rabbit hole.
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  Speaker 1: It's time now for the spot, okay, And it looks
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  Speaker 1: like you have shopping on your mind right now. So
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  Speaker 1: we're following your clicks and your curiosity, and it looks
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  Speaker 1: like you want to know more about what's going on
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  Speaker 1: over at SACKS and then what it all means for
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  Speaker 1: how shopping might look like in the future. So let's
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  Speaker 1: go ahead and break it down. Michelle Franzen is here
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  Speaker 1: up first, and then we have Heat the Herzog as well.
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  Speaker 1: Thank you both for being here. So let's start with
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  Speaker 1: SAXVI that have a new exiting bankruptcy with a new
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  Speaker 1: plan to focus on luxury shopping and service. Our Michelle
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  Speaker 1: friends and of course joins me now here in New
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  Speaker 1: York City from our newsroom. Michelle, good to see you.
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  Speaker 1: So SAS has closed dozens of stores and slashed its workforce.
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  Speaker 1: There's also a name change happening. So what more do
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  Speaker 1: we know about that whole transformation.
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  Speaker 2: Well, of course, Geo, some diehard sax shoppers will be
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  Speaker 2: glad to know that some of those iconic brands and
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  Speaker 2: the stores are safe for now. Sacks Global is, of
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  Speaker 2: course one of the largest brand luxuries and it announced
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  Speaker 2: today that it's emerged from bankruptcy protection. That's a pretty
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  Speaker 2: quick turnaround. It just filed for that bankruptcy protection in January,
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  Speaker 2: and of course it's got those names like Neiman Marcus,
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  Speaker 2: Sacks Fifth Avenue, and Bergdorf Goodman. And the New York
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  Speaker 2: based company merged from that bankruptcy coming up with a
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  Speaker 2: new entity. They're now going to be known as Exemplar
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  Speaker 2: Luxury Group. It followed months of streamlining their bottom line,
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  Speaker 2: as you mentioned, and of course that key rebranding.
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  Speaker 1: Yeah, and you just mentioned their Sex Global is one
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  Speaker 1: of the largest multi brand luxury retailers in the world. Really,
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  Speaker 1: so how did the company cut its debt and secure
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  Speaker 1: five hundred million dollars in exit finance.
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  Speaker 2: Well, there was a little pain involved, of course, but
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  Speaker 2: the New York based company said that it reduced its
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  Speaker 2: debt by some seventy five percent that allowed them to
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  Speaker 2: secure that funding you just mentioned. And also they had
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  Speaker 2: to shutter some stores. They used to have thirty three
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  Speaker 2: Nieman Marcus, three Sacks Fifth Avenue stores and thirty six
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  Speaker 2: Nemen Marcus. They reduce that to about fifteen Sax stores
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  Speaker 2: and thirty three Nemen Marcus, and of course they have
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  Speaker 2: that one Bergdorf store and they also shuttered that outlet,
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  Speaker 2: the Sacks off fifth there's about twelve of those discount
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  Speaker 2: stores still available.
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  Speaker 1: Wow, and so many people love those. Okay, So what
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  Speaker 1: should people know about the retailer's new business model and
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  Speaker 1: the shopping experience really, because that's going to be a
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  Speaker 1: little different.
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  Speaker 2: It is going to be a little bit different, but
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  Speaker 2: the company is pledging to make sure that all the
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  Speaker 2: comforts that their shoppers knew before are still intact. They
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  Speaker 2: want to make sure that they offer their shopper the
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  Speaker 2: greatest experience that fitting their name of exemplary luxury group.
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  Speaker 2: Also the personalization. They say, many of those brands that
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  Speaker 2: you're used to will still be there, but they're also
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  Speaker 2: going to be on the hunt for some of those
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  Speaker 2: latest and greatest trends.
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  Speaker 1: Michelle, you got to wonder, though, with what's happening with
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  Speaker 1: the economy right now, the state of the economy is
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  Speaker 1: pivoting to just love jury the right strategy here.
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  Speaker 2: Well, you know this all came about because of all
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  Speaker 2: the debt that this global company encouraged with all their
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  Speaker 2: brand names, and they say that they're hoping that this
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  Speaker 2: will bring shoppers back in droves. But as you well know,
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  Speaker 2: it's going to be the consumer and the shopper in
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  Speaker 2: the end that decides how they're going to spend their money.
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  Speaker 1: Yeah. Absolutely, it's all about the consumer. Michelle, friends, and
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  Speaker 1: great to have you here on search. Thank you so
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  Speaker 1: much for joining us. Let's go ahead and bring in
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  Speaker 1: retail and finance expert our friend Heatha Herzog on the
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  Speaker 1: future of shopping. He thought, it's so good to see you. Okay,
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  Speaker 1: So what is this SAX Global News signal for malls
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  Speaker 1: and of course other brick and mortars.
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  Speaker 3: Well, let's talk about the consumer for a second, because
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  Speaker 3: you're right, it really is all about the consumer for
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  Speaker 3: Sasmith Avenue, but they're zeroing in on a very specific consumer,
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  Speaker 3: which is the luxury shopper. Now we've been on the
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  Speaker 3: show talking about the K shaped economy. That's basically if
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  Speaker 3: you look at the economy, like, okay, the upper half
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  Speaker 3: is considered the lugury shopper, where they're price agnostic. Things
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  Speaker 3: don't really matter. The price of strawberries are increasing, they
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  Speaker 3: don't mind. But the lower half. The lower half is
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  Speaker 3: the one they're looking for the deals. To be honest,
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  Speaker 3: I'm in that lower half. I care about the price
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  Speaker 3: of strawberries. So what Sex is really doing is zeroing
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  Speaker 3: in on the upper half. They want to bring back
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  Speaker 3: that luxury customer back into the source and really regain
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  Speaker 3: that trust that they have since maybe waned. It might
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  Speaker 3: have waned over the last couple months as they declared
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  Speaker 3: chapter eleven.
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  Speaker 1: You know, here's a question that a lot of people
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  Speaker 1: have right now. Are malls dying or is gen Z
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  Speaker 1: somehow helping them survive?
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  Speaker 3: Yeah, that's a great question, and really it is gen
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  Speaker 3: Z that's helping them survive. So according to Price, Waterhouse
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  Speaker 3: and placer Ai, gen Z mall traffic is up fifty
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  Speaker 3: seven percent and around thirty five percent of gen zs
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  Speaker 3: are making their purchases in the mall. Now, let me
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  Speaker 3: give you a little background information on how the gen
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  Speaker 3: Z shopper shops. Now, now it's really about hands free.
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  Speaker 3: We saw RayBan come out with those new glasses where
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  Speaker 3: you're taking pictures and listening to music. Cash app came
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  Speaker 3: out with this thing. I have one right here. It's
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  Speaker 3: called the tag. This is where you can pay. It's
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  Speaker 3: really cute. You could pay just by tapping this kind
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  Speaker 3: of like a credit card. So they really want to
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  Speaker 3: just be walletless, and they want to go into malls
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  Speaker 3: to go ahead and have that experience with their friends.
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  Speaker 3: It's echoing nineteen eighty eight, but really, I think a
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  Speaker 3: lot of these mall owners and operators are welcoming that.
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  Speaker 1: Yeah, I mean, I think we all love to see
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  Speaker 1: it in person, stuff off the internet. Okay, So despite
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  Speaker 1: gen Z's interests in malls, though, there's still that question,
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  Speaker 1: right why is retail suffering right now?
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  Speaker 3: There are a couple of reasons why, And I think
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  Speaker 3: we saw a real bifurcation during the pandemic. While we
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  Speaker 3: were all used to going into the stores, getting in
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  Speaker 3: our cars driving, we had to hunk down. In most cases,
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  Speaker 3: some of us were sheltering in for about a month
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  Speaker 3: or two. So the stores really reimagined how we should shop.
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  Speaker 3: Things got faster and things were delivered to us, but
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  Speaker 3: that didn't go back to how we originally shopped. So now,
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  Speaker 3: as a consumer, we're very used to getting things delivered
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  Speaker 3: and getting things delivered very fast via online, and I
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  Speaker 3: think mall operators and retailers really want to see that
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  Speaker 3: traffic come back. It's slow moving, but as I had said,
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  Speaker 3: the store traffic is increasing. It's just so I want
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  Speaker 3: to kind of reposition it. Retailers aren't necessarily failing because
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  Speaker 3: their online presence is doing really, really well. But that experience,
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  Speaker 3: the ones that we remember going to, getting having it
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  Speaker 3: be a day of shopping. Retailers want to get back
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  Speaker 3: to that. Yeah.
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  Speaker 1: I think we all want to get at least we do.
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  Speaker 1: I don't know, we're eighty five kids do anyway? All right,
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  Speaker 1: Etha Herzalg, thank you so much. Appreciated