The parent company of luxury brands Saks Fifth Avenue and Neiman Marcus has filed for Chapter 11 bankruptcy protection.

Saks Global filed for bankruptcy to be able to reorganize its debt, Reuters reported.

The New York Times said the filing was expected for months, but it still had a ripple effect in the fashion industry.

The company filed late Tuesday due to the debt it accrued after purchasing Neiman Marcus in 2024. It bought its former rival for $2.65 billion.

CNN said the merger caused financial problems because it was already in what the cable news channel described as a “precarious financial situation” before the deal, but then customers’ habits changed, moving away from big department stores.

Competitor Macy’s has been closing stores and Lord & Taylor shuttered all locations.

Marc Metrick left the company as CEO earlier this month, with Saks Global executive chairman Richard Baker taking over. But he is now leaving and will be replaced by former Neiman CEO Geoffroy van Raemdonck, CNN reported.

Saks Global said it now has $1 billion of debtor-in-possession financing and will pay for the company’s operations and turnaround initiatives. There will be another $500 million in funding once the company comes out of bankruptcy.

The New York Times noted that the filing will not likely mean the disappearance of all Saks, Neiman Marcus, or Bergdorf Goodman stores, which the company also owns, but some may close as the company drops expensive leases.

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