Saks Off 5th Closing Most Stores Amid Luxury Shift

In a bold pivot toward high-end retail, Saks Global has announced the closure of nearly 65 discount stores under its Saks Off 5th and Last Call banners. This move, revealed on January 29, 2026, comes on the heels of the company's bankruptcy filing earlier this month and signals a strategic refocus on its core luxury brands. For bargain-hunting shoppers who flocked to these outlets for designer deals, the news marks the end of an era—but one that underscores broader shifts in the fashion industry.

The Scope of the Closures

Saks Global, the parent entity overseeing Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman, detailed plans to shutter almost 60 Saks Off 5th locations and all five remaining Last Call storefronts. Only a dozen Off 5th stores will stay operational, primarily repurposed as clearance channels for excess inventory from the luxury flagships. "These remaining outlets will serve as a vital tool for managing residual stock," the company stated in its press release, emphasizing a departure from direct merchandising for the discount arm.

Closing sales are set to kick off on January 31 at affected stores, offering savvy consumers one last chance to snag markdowns on past-season luxury items. The Saks Off 5th website will also transition, likely mirroring this inventory-focused model. This isn't a total wipeout for the brand—Saks Global aims to leverage the survivors for efficiency—but it spells uncertainty for hundreds of employees and loyal customers in cities across the US.

Geographic Impact on US Shoppers

While exact locations haven't been fully disclosed, the closures will ripple through major markets like New York, Los Angeles, and Chicago, where Off 5th outlets have long been go-to spots for affordable access to brands like Gucci, Prada, and Michael Kors. In the Midwest and South, smaller communities may lose their only local discount luxury option, pushing shoppers toward online alternatives or full-price retailers. This regional shake-up could accelerate the digital migration in retail, as e-commerce platforms like Nordstrom Rack and Macy's Backstage vie for the discount dollar.

Background: Debt and the Neiman Marcus Deal

The writing was on the wall for Saks Off 5th long before this announcement. Saks Global's financial woes intensified after its 2024 acquisition of rival Neiman Marcus for $2.65 billion, a deal that saddled the company with over $5 billion in debt. Even prior to the merger, the discount segment struggled against rising operational costs and evolving consumer habits. Bankruptcy proceedings, filed under Chapter 11, provide a lifeline for restructuring, allowing Saks to shed underperforming assets like these outlets.

Industry analysts point to the acquisition as a double-edged sword. On one hand, it consolidated Saks' position in the luxury echelon alongside Bergdorf Goodman. On the other, it amplified vulnerabilities in the discount space, where margins are razor-thin. "The Off 5th model was always a hedge against luxury volatility," notes retail expert Sarah Chen of Everythiiing.com. "But with debt piling up, it's the first to go."

Market Trends Driving the Decision

Consumer behavior is at the heart of this transformation. Luxury spending has cooled since the post-pandemic boom, with many shoppers questioning the value of department store markups. Direct-to-consumer sales from brands—think Chanel's booming e-shop or Louis Vuitton's standalone sites—have surged 25% year-over-year, per recent Deloitte reports. Middlemen like Saks Off 5th, once essential for off-price deals, are increasingly bypassed as affluent buyers seek authenticity and immediacy.

Moreover, the discount sector faces stiff competition from fast-fashion giants like Shein and Temu, which offer trendy pieces at rock-bottom prices without the designer cachet. Saks Global's pivot reflects a broader industry trend: survival through specialization. Competitors like Nordstrom have similarly trimmed outlet footprints to bolster full-line stores, while Amazon's luxury push via Prime Wardrobe adds digital pressure.

Implications for Employees and the Retail Landscape

The human cost can't be overlooked. With up to 65 stores closing, Saks Global faces layoffs for potentially thousands of workers in sales, logistics, and management roles. The company has pledged severance and job placement support, but in a tight labor market, transitions won't be seamless. Unions and retail advocates are already calling for transparency on affected sites.

For the wider luxury retail ecosystem, this is a cautionary tale. As department stores grapple with $100 billion in collective US debt, Saks' strategy could inspire copycats. Neiman Marcus, still integrating post-merger, may see operational synergies, but questions linger about sustaining Off 5th's remnants without fresh buys. Will these outlets evolve into pop-up clearance hubs? Or fade into obsolescence?

What Lies Ahead for Saks Global

Looking forward, Saks Global is betting big on its luxury triad: Saks Fifth Avenue's experiential stores, Neiman Marcus' personalization tech, and Bergdorf Goodman's exclusivity. Investments in AI-driven inventory and omnichannel retail—such as seamless online-to-store fulfillment—aim to recapture high-spenders. CEO Marco Bizzarri, a veteran from Gucci, envisions a "streamlined portfolio" that prioritizes profitability over volume.

Shoppers, meanwhile, should monitor the closing sales for steals, but prepare for a leaner discount landscape. As luxury democratizes through resale apps like The RealReal and Vestiaire Collective, the Off 5th closures highlight a key truth: even bargains have their limits in an era of direct access and economic caution.

This shake-up isn't just about Saks—it's a snapshot of retail's reinvention, where adaptation spells survival. Stay tuned to Everythiiing.com for updates on the bankruptcy proceedings and emerging luxury trends.