Saks Fifth Avenue, the luxury department store that has anchored Canal Place since the mid-1980s, will close in the coming months as its bankrupt parent company downsizes its footprint.
Saks Global, which filed for Chapter 11 bankruptcy protection last month, announced Tuesday that it will close eight Saks Fifth Avenue stores and one Neiman Marcus around the country.
The Canal Place store will remain open until the end of April, a company spokesperson said in a statement.
“As part of Saks Global’s ongoing evaluation of its physical footprint, we have made the decision to close select Saks Fifth Avenue and Neiman Marcus locations, including the Saks Fifth Avenue New Orleans location, based on a number of factors, including performance and lease economics,” Maddie Hayman, the spokesperson, said.
Canal Place General Manager Matt Brown said that local shopping center management has been closely monitoring the Saks Global bankruptcy and has been “proactive in preparing for this possibility.”
“We have already initiated discussions with tenants that align with our commitment to serving the discerning shopper,” he said, adding that he hoped to have more information about new tenants in the near future.
The pending closure of Saks is a blow to Canal Street and underscores the challenges downtown boosters have faced in recent years, as they try to attract and retain quality retailers to New Orleans’ historic shopping corridor. In November, luxury jeweler Adler’s announced it was closing its Canal Street store, along with its Metairie location, after more than 120 years in business.
Most of the other prominent department stores that once lined the avenue decamped for the suburbs or went out of business decades ago.
David Rubenstein, whose family has run Rubenstein menswear store on Canal Street for more than a century, said the closure will be “a bit of a hiccup for Canal Street” but shouldn’t be seen as a reflection of New Orleans.
“This is strictly a bankruptcy reorganization,” Rubenstein said. “They had financial troubles. It’s a corporate thing, not a New Orleans thing.”
Disappointed, moving forward
The Canal Place complex, which includes an office tower, shops and the Westin Canal Place hotel, was developed in phases in the early 1980s by Joseph Canizaro, at a time when several new high rises in New Orleans’ downtown area were under construction.
Developer Darryl Berger’s Berger Company with Ogden Development later bought the Shops at Canal Place and operated it for several years. In 2017, they sold the shopping complex to O’Connor Capital Partners, a New York-based real estate investment, management and development firm for an undisclosed price.
In a statement from its local attorney, Mike Sherman, O’Connor Capital Partners said sales at Canal Place “remain very strong.”
“While we are disappointed to see Saks Fifth Avenue depart, this development stems from the company’s broader financial restructuring and not from the strength of Canal Place or the New Orleans market,” the statement said. “We are already working with luxury retailers eager to secure a New Orleans location.”
According to Saks Global, the closures are the “first phase” of its reorganization as executives look to cut down their portfolio and “focus on profitable locations with the highest growth potential.”
Four of the stores slated for closure are in markets that already have another store owned by Saks Global, also the parent company of Neiman Marcus and Bergdorf Goodman. Both brands were acquired under the leadership of former Saks CEO Richard Baker, who took on about $2.2 billion of additional debt to finance the transaction.
The company began defaulting with a missed interest payment due Dec. 30.
Saks Global CEO Geoffroy van Raemdonck, the former Neiman Marcus executive who took over following the Jan. 13 bankruptcy filing, said in a statement that the closures would reinforce the brands’ reputation as a luxury destinations “while positioning our company to make investments that enable long-term growth and value creation.”
The closures will leave Saks Global with 25 remaining Saks Fifth Avenue Stores and 35 Neiman Marcus stores, as company officials announced plans to decide which to keep open based on “factors including performance and lease economics.”
Earlier this month, the company closed a majority of its Saks OFF 5th retail locations and all of its Last Call stores.
Last month, luxury fashion brand Chanel shut down its boutique within the Canal Place Saks after the department store racked up about $136 million in unpaid bills.
Other Saks Global locations set to close this spring include Birmingham, Alabama; Columbus, Ohio; Richmond, Virginia; Tulsa, Oklahoma; East Rutherford, New Jersey; Philadelphia; and Phoenix, the later three of which have other Saks or Neiman stores.
