Amazon says Saks investment is worthless after bankruptcy

Amazon He wants a federal judge to reject Saks Global’s bankruptcy financing plan, writing in court documents that the beleaguered department store “burned through hundreds of millions of dollars in less than a year” and failed to honor the deal.

When Saks acquired Neiman Marcus for $2.7 billion in December 2024, Amazon invested $475 million in the venture on the grounds that the retailer would begin selling its products on Amazon’s website and that the tech company would offer technology and logistics expertise.

“This capital investment is now likely worthless,” Amazon’s lawyers wrote in a filing Wednesday, just hours after Saks filed for Chapter 11 bankruptcy protection. “Saks has consistently failed to meet its budgets, burning through hundreds of millions of dollars in less than a year and on top of hundreds of millions of dollars in unpaid invoices to its retail partners.”

Saks as part of the deal started A branded “Saks at Amazon” store featuring a variety of luxury fashion and beauty products on the e-commerce company’s website. It also agreed to pay a referral fee for Saks-branded products sold on the platform, guaranteeing Amazon payments of at least $900 million over eight years.

Amazon argued in its filing that Saks’ bankruptcy financing plan harmed the company and other creditors because it burdened parts of the Saks company with new debt it did not previously have. This also pushes Amazon further down the pecking order in terms of refunds, which reduces the potential amount that could be awarded at trial, the e-commerce company said in its filings.

Amazon wrote that it “hopes” Saks will resolve its concerns, but if not, it “may seek more drastic remedies,” including the appointment of an auditor or trustee.

At a hearing Wednesday in U.S. Bankruptcy Court in Houston, Judge Alfredo Perez allowed Saks to begin tapping into $1.75 billion in new bankruptcy financing after the company argued it would face immediate liquidation without it. It has not yet issued a decision on Amazon’s request.

Saks’ acquisition of Neiman Marcus brought in a number of new investors, including names from the technology industry. For Amazon, the deal secures Saks’ presence on its expanding online store, where the company aims to attract bigger brands and, in particular, expand its luxury range.

The Saks deal also raised the possibility of Amazon deepening its investment in the department store chain. Amazon is determined to have a larger presence in physical retail and has tried various concepts over the years and scrapped some.

The company has made similar investment deals in the past. In 2022, Amazon acquired a 2% stake in Grubhub in exchange for the food delivery company adding perks to Prime members. Amazon expanded its stake in the company to 18% in 2024.

Amazon declined to comment beyond what it stated in the filing. Saks did not immediately respond to a request for comment.

software giant sales force At the same time it acquired Neiman Marcus, it also became a minority shareholder in Saks, but retained a smaller stake than Amazon. It’s also unclear whether he plans to object to the bankruptcy plan.