Amazon says Saks investment is worthless after bankruptcy

Amazon wants a federal judge to reject Saks Global’s bankruptcy financing plan, writing in court papers the beleaguered department store “burned through hundreds of millions of dollars in less than a year” and failed to hold up their agreement. 

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

“That equity investment is now presumptively worthless,” Amazon’s attorneys wrote in a Wednesday filing, hours after Saks filed for Chapter 11 bankruptcy protection. “Saks continuously failed to meet its budgets, burned through hundreds of millions of dollars in less than a year, and ran up additional hundreds of millions of dollars in unpaid invoices owed to its retail partners.”

As part of the deal, Saks launched a branded “Saks at Amazon” storefront on the e-commerce company’s website featuring a range of luxury fashion and beauty items. It also agreed to pay a referral fee for Saks-branded goods sold on the platform, guaranteeing at least $900 million in payments to Amazon over eight years. 

In its filing, Amazon argued that Saks’ bankruptcy financing plan harms the company, and other creditors, because it saddles parts of the Saks corporation with new debt that it previously didn’t have. It also pushes Amazon further down the pecking order in terms of repayment, which reduces the amount it could potentially be repaid during the proceedings, the e-commerce company said in the filings. 

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

During a hearing on Wednesday in U.S. Bankruptcy Court in Houston, Judge Alfredo Perez allowed Saks to start tapping into $1.75 billion in new bankruptcy financing after the company argued it would face immediate liquidation without it. He has yet to issue a ruling on Amazon’s request. 

Saks’ acquisition of Neiman Marcus brought a slew of new investors, including names from the technology industry. For Amazon, the deal guaranteed Saks’ presence on its sprawling webstore, where the company has sought to attract bigger brands and grow its luxury selection, in particular.

The Saks deal also raised the possibility that Amazon could deepen its investment in the department store chain. Amazon has been determined to have a bigger presence in physical retail and it’s experimented with several concepts over the years, scrapping some along the way.

The company has also struck similar investment agreements in the past. In 2022, Amazon took a 2% stake in GrubHub in exchange for the food delivery company adding perks for Prime members. Amazon expanded its stake in the company to up to 18% in 2024.

Amazon declined to comment beyond what it stated in the filing. Saks didn’t immediately respond to a request for comment.

Software giant Salesforce also became a minority shareholder in Saks during its acquisition of Neiman Marcus, but it took a smaller stake than Amazon did. It’s unclear if it also plans to object to the bankruptcy plan.