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Saks ending ecommerce partnership with Amazon: Report
Bankrupt retailer Saks Global is ending its "Saks on Amazon" partnership with e-commerce giant Amazon.com, a source with direct knowledge of the decision said on Friday.
The partnership was already in dire straits when Saks filed for bankruptcy earlier this month, but the retailer had yet to say outright it was exercising its right under Chapter 11 bankruptcy to reject the contract.
On Friday, a source said Saks will wind down its Saks on Amazon storefront so it can focus on parts of its business it sees as spurring more growth.
"The Saks on Amazon storefront saw limited brand participation," the person said, adding that Saks feels it would be better served driving traffic to Saks.com.
In a statement to Reuters, an Amazon spokesperson said: "Beyond the Saks experience, the Amazon luxury store continues to offer a wide selection of high-end designer styles, and we're adding more luxury brands regularly."
Saks declined to comment.
The partnership arose from Amazon's $475 million investment in Saks' business in 2024. The companies agreed to an arrangement in which Saks would sell products on Amazon, paying the e-commerce giant at least $900 million over eight years.
But comments by Amazon's lawyer at a court hearing after Saks filed bankruptcy indicated their relationship had soured, and court battles may lie ahead.
At the hearing, the Amazon lawyer argued that Saks improperly pledged its flagship Fifth Avenue store in Manhattan as collateral for a $1.75 billion loan that is allowing it to operate while in bankruptcy. The lawyer said that property had already been collateralized to guarantee Saks' payments to Amazon under their partnership.
The partnership was also facing pushback from Saks' top luxury brands, who feared selling on a mass-market ecommerce site would dilute their brand, according to two sources familiar with these brands' thinking.
It was likely the brands would use bankruptcy negotiations to push back on the deal, the people said.
Source: EconomicTimes
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