Saks Ends Amazon E-Commerce Partnership Amid Bankruptcy

Partnership Terminated Amid Bankruptcy

Bankrupt retailer Saks Global is officially ending its "Saks on Amazon" e-commerce partnership. The decision comes as the company operates under Chapter 11 bankruptcy protection, which grants it the right to reject existing contracts to restructure its business operations.

Strategic Shift and Soured Relations

According to sources, the storefront on Amazon experienced limited participation from luxury brands concerned about brand dilution on a mass-market platform. Saks will now focus on driving traffic to its primary digital channel, Saks.com, which it considers a more significant growth driver. The relationship had already soured, with legal disputes arising over collateral for a $1.75 billion loan obtained by Saks.

Market Impact and Future Outlook

The termination highlights the difficulties in merging luxury retail with mass e-commerce platforms. While Saks pivots to its core digital assets, an Amazon spokesperson confirmed that its luxury store will continue to expand with other high-end brands. The dissolution may lead to further court battles over the original partnership agreement, which involved a $475 million investment from Amazon.

Summary

Saks' exit from the Amazon platform is a strategic decision made during its bankruptcy proceedings to strengthen its core brand and e-commerce presence. The market will now watch how Saks navigates its restructuring and resolves outstanding financial obligations with Amazon.

FAQ

Q: Why is Saks ending its partnership with Amazon?
A: Saks is using its Chapter 11 bankruptcy rights to reject the contract, aiming to focus on its primary e-commerce site, Saks.com, as a better growth driver.

Q: What was the original deal between Saks and Amazon?
A: The partnership stemmed from a $475 million investment by Amazon in 2024, with Saks agreeing to sell products on the platform and pay Amazon at least $900 million over eight years.

Source: Reuters via Investing.com