Amazon just watched its $475 million gamble on luxury retail evaporate overnight. The e-commerce giant filed legal papers Wednesday demanding a federal judge reject Saks Global's bankruptcy financing plan, arguing the department store "burned through hundreds of millions of dollars in less than a year" and broke its core agreements. It's a stunning reversal for one of tech's most ambitious retail bets and signals how quickly Amazon's carefully structured investment deal could unravel in bankruptcy court.
Amazon is pulling the emergency cord on its Saks investment. In court papers filed Wednesday just hours after Saks Global filed for Chapter 11 bankruptcy protection, the e-commerce giant's lawyers came out swinging, describing a retail operation that collapsed under its own weight almost immediately after a major acquisition.
The $475 million Amazon invested when Saks acquired Neiman Marcus for $2.7 billion in December 2024 was supposed to be a strategic masterstroke. Amazon would get guaranteed placement for luxury fashion and beauty on its sprawling marketplace through an exclusive "Saks at Amazon" storefront. In return, Saks agreed to minimum payments of at least $900 million to Amazon over eight years in referral fees. The tech company would also provide technology and logistics expertise to modernize the struggling department store chain.
What happened instead, according to Amazon's court filing, was a financial catastrophe. "That equity investment is now presumptively worthless," Amazon's attorneys wrote bluntly. "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."
