SEATTLE (dpa-AFX) - Amazon (AMZN) has asked a federal judge to block Saks Global's bankruptcy financing plan, arguing that the retailer has mismanaged its business and left the tech company with an equity stake that is now effectively worthless.
In court filings submitted shortly after Saks sought Chapter 11 protection, Amazon said the department store group blew through hundreds of millions of dollars in under a year and failed to meet the commitments it made when Amazon invested $475 million in its takeover of Neiman Marcus in late 2024. That deal, valued at $2.7 billion, was meant to cement a long-term partnership between the two companies.
As part of the agreement, Saks launched a dedicated 'Saks at Amazon' storefront offering luxury fashion and beauty products. The retailer also agreed to pay referral fees on Saks-branded goods sold through Amazon, guaranteeing at least $900 million in payments over eight years.
Amazon now contends that Saks' proposed debtor-in-possession financing would load parts of the business with new debt and push Amazon further down the creditor hierarchy, reducing any chance of recovery. The company said it hopes the matter can be resolved but warned that it may seek tougher measures, including the appointment of an examiner or trustee, if its concerns are ignored.
At a hearing in Houston, Judge Alfredo Perez allowed Saks to begin drawing on $1.75 billion in emergency financing after the retailer said it would otherwise face immediate liquidation. A ruling on Amazon's objections is still pending.
The Neiman Marcus deal had drawn in many technology-sector investors, with Amazon viewing the partnership as a way to expand its luxury offering and deepen its presence in physical retail. The company has made similar strategic bets in recent years, including taking a stake in Grubhub in 2022 that later grew to as much as 18 percent.
Salesforce also became a minority investor in Saks through the Neiman acquisition, though with a smaller holding than Amazon. It has not yet said whether it will challenge the bankruptcy plan.
Amazon closed at $238.18, up 0.62%, and is trading slightly lower after hours at $237.95, down 0.10%, on the NasdaqGS.
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