Amazon Warns of ‘Drastic’ Measures After Saks Bankruptcy Wipes Out $475 Million Investment

Amazon has urged a federal bankruptcy judge to reject Saks Global’s proposed financing plan, saying the department store operator rapidly burned through cash and failed to honor key commitments tied to Amazon’s investment.

In court filings submitted Wednesday, Amazon said the $475 million equity investment it made less than a year ago is now “presumptively worthless,” following Saks’ decision to seek Chapter 11 bankruptcy protection. The filing came just hours after Saks disclosed its restructuring plans.

Amazon invested in Saks in December 2024, when the retailer completed its $2.7 billion acquisition of Neiman Marcus. As part of the deal, Saks agreed to sell its products on Amazon’s platform through a dedicated “Saks at Amazon” storefront, while Amazon would provide logistics and technology support.

The agreement also included a long-term commercial arrangement under which Saks guaranteed at least $900 million in referral fee payments to Amazon over eight years for Saks-branded goods sold on Amazon’s website. Despite that structure, Amazon told the court that Saks repeatedly missed budgets, spent “hundreds of millions of dollars in less than a year,” and accumulated additional unpaid invoices to retail partners.

Amazon objected to Saks’ bankruptcy financing on the grounds that it pushes new debt onto parts of the corporate structure that previously did not carry it, while subordinating Amazon’s claims in the repayment hierarchy. That, Amazon argued, significantly reduces any potential recovery during the bankruptcy process.

While Amazon said it hopes Saks will address its concerns, the company warned it may pursue “more drastic remedies” if the plan moves forward unchanged. Those options include seeking the appointment of an independent examiner or even a trustee to oversee the retailer’s restructuring.

At a hearing in U.S. Bankruptcy Court in Houston, Judge Alfredo Perez allowed Saks to begin drawing on $1.75 billion in new debtor-in-possession financing, after the retailer said it would face immediate liquidation without access to fresh funds. The judge has not yet ruled on Amazon’s request to block the financing plan.

The Saks transaction had been seen as a strategic win for Amazon, giving the company a stronger foothold in luxury retail and supporting its broader push to attract high-end brands to its marketplace. Amazon has long explored ways to expand beyond pure e-commerce, including selective investments in physical and premium retail concepts.

Amazon has made similar strategic bets before. In 2022, it took a minority stake in Grubhub, later increasing its position, in exchange for integrating Prime member benefits into the food delivery service.

Other investors were also drawn into Saks through the Neiman Marcus acquisition, including Salesforce, which took a smaller minority stake. It remains unclear whether Salesforce or other investors will formally challenge the bankruptcy plan.

Neither Amazon nor Saks offered comment beyond their court filings, leaving the dispute to play out in bankruptcy court — where the fate of Amazon’s luxury retail gamble now hangs in the balance.