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Saks’ $2.2 Billion Fire Alarm

The high-stakes roll-up of iconic department store brands Saks and Neiman Marcus is now straining under the weight of its junk-bond financing. Facing spiking yields, vendor unrest, and now Trump’s trade war, Richard Baker’s bold bet is fast becoming a cautionary tale.

Richard Baker
Last December, Richard Baker got his hands on Neiman Marcus Group, which was owned by a bunch of wise-guy Wall Street hedge fund investors, including Davidson Kempner and Sixth Street. Baker called the deal “a milestone transaction”—one that he hoped would “redefine” the “luxury shopping experience.” Photo: Marcel Kusch/picture alliance/Getty Images
William D. Cohan
April 20, 2025

When the yield on the average junk bond spiked 100 basis points, to 8.5 percent, shortly after Donald Trump’s “Liberation Day” tariff presentation, there was bound to be serious fallout for individual corporate bond issuers. Et voilà, here we are. Take, for instance, the $2.2 billion senior secured bond issued in December by Saks Global, the new parent company of the retail behemoth formed by the merger of Saks Fifth Avenue with Neiman Marcus and Bergdorf Goodman. The five-year bond was issued to help finance Hudson’s Bay Company’s $2.7 billion acquisition of Neiman Marcus Group, which had emerged from bankruptcy in 2020.