Ritson: Why Saks couldn’t scale its way out of irrelevance
Mark Ritson examines the department store and finds the patient very unwell indeed. The diagnosis goes beyond the balance sheet to the heart of brand strategy.
Saks in midtown Manhattan
When Richard Baker announced Saks’ acquisition of Neiman Marcus in late 2024, he deployed the kind of corporate poetry that should set off alarm bells in any trained marketer’s head. The deal to create Saks Global, the executive chairman declared, had “created an unparalleled multi-brand luxury portfolio with tremendous growth potential.”
Fourteen months later, Saks Global filed for bankruptcy. Amazon wrote off its $475 million investment as “presumptively worthless.” Chanel was left with $136 million in unpaid fees. And the 159-year-old department store that once dressed Grace Kelly and brought Louis Vuitton to the American elite slipped into ignominy.
What happened? The short answer is too much debt. The more interesting answer is not enough brand strategy.
Baker’s thesis was seductively simple: combine America’s two great luxury department stores into one colossus, gain leverage over suppliers, and dominate the high-end retail market. Scale, in other words. The same logic that has driven every holding company merger since time began: bigger is better.
