(Bloomberg) — Saks Global Enterprises told creditors it had an adjusted loss of more than $100 million last fiscal year, one day after it announced a $350 million financial lifeline ahead of a looming coupon payment.
The luxury retailer has $275 million in overdue payments to suppliers, management told bondholders in a Friday call where it also shared figures from the 12-month period ended Feb. 1, according to people with knowledge of the call’s contents. Combined with results from recently acquired Neiman Marcus, the company recorded $161 million in adjusted earnings last year, Saks reported.
The company took no questions on that call, according to people with knowledge of the matter. Saks also told bondholders it was pursuing more growth and synergies that would improve results, but didn’t elaborate much on those initiatives, according to participants on the call. It expects to realize over $285 million in run-rate synergies by the end of this year, up from initial expectations of $150 million.
The value of inventory at the end of the year was $2.1 billion, Saks reported in its earnings. The company also said US tariffs could raise its costs by eight to-10%, some of the people said.
The company’s bonds due 2029 rallied Friday, gaining as much as 9 cents on the dollar to 45.5 cents, according to Trace. The price sank below 36 cents earlier this month, reflecting holders’ deep skepticism they would even receive their first coupon payment of about $120 million, due in June.
The financing deal announced Thursday involves $300 million in the form of a new so-called first-in-last-out loan under its asset-based credit facility, and an additional $50 million term loan, according to the company’s announcement. That improves the $438 million liquidity position at the end of last year, which included $415 million available under an ABL facility.
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