Amazon is escalating its legal fight with Saks Global, arguing in federal court that its $475 million investment tied to the luxury retailer has effectively been wiped out following Saks’ Chapter 11 bankruptcy filing.
In new court papers obtained by CNBC, Amazon urged a judge to reject Saks’ proposed bankruptcy financing plan, accusing the company of mismanagement and financial collapse less than a year after its deal was finalized.
The dispute stems from Amazon’s investment in Saks Global, tied to Saks Global’s December 2024 acquisition of Neiman Marcus for roughly $2.7 billion. As part of that transaction, Amazon invested $475 million in Saks, banking on a partnership that would bring Saks merchandise to Amazon’s platform, with Amazon providing logistics and technology support.
“That equity investment is now presumptively worthless,” Amazon’s attorneys wrote in a filing on Wednesday, January 14, submitted just hours after Saks sought bankruptcy protection.
The filing claims Saks “burned through hundreds of millions of dollars in less than a year,” repeatedly missed financial targets, and accumulated hundreds of millions more in unpaid invoices to retail partners.
Under the original agreement, Saks launched a branded “Saks at Amazon” storefront on Amazon's site, offering luxury fashion and beauty products. The deal also required Saks to pay referral fees on Saks-branded goods sold via the platform, guaranteeing Amazon at least $900 million in payments over eight years.
Amazon now argues that Saks’ bankruptcy financing plan unfairly harms it and other creditors. According to the filing, the plan loads certain Saks entities with new debt they did not previously carry and pushes Amazon further down the repayment hierarchy, reducing any potential recovery.
While Amazon said it “hopes” the dispute can be resolved, it warned it may seek “more drastic remedies,” including asking the court to appoint an examiner or trustee.
During the hearing in U.S. Bankruptcy Court in Houston, Judge Alfredo Perez allowed Saks to begin drawing on up to $1.75 billion in new bankruptcy financing after the company said it would face immediate liquidation without access to the funds. The judge has not yet ruled on Amazon’s objection.
Saks Global, the parent company of Saks Fifth Avenue, filed for Chapter 11 this week as it struggles under the debt load from the Neiman Marcus acquisition and a broader slowdown in the luxury department store sector. The filing followed leadership changes and reports of strained vendor relationships.
Amazon has made similar strategic investments before, including a stake in Grubhub tied to Prime member perks.
Salesforce also became a minority shareholder in Saks as part of the Neiman Marcus deal, though with a smaller stake. It remains unclear whether Salesforce will formally challenge the bankruptcy plan.