Bankrupt luxury retailer Saks Global is ending its "Saks on Amazon" e-commerce partnership with Amazon.com as the company refocuses its business strategy during Chapter 11 proceedings.

According to reporting from Reuters, the retailer will wind down its dedicated Amazon storefront to concentrate on areas it believes will generate stronger growth. The source told Reuters that the Saks on Amazon storefront saw limited brand participation, adding that Saks feels it would be better served driving traffic to Saks.com.

The partnership emerged from Amazon's $475 million investment in Saks' business in 2024. The companies last year agreed to an arrangement in which Saks would sell products on Amazon, paying the e-commerce giant at least $900 million over eight years.

Relations between the two companies had already deteriorated before Saks filed for bankruptcy earlier this month. At a court hearing following the filing, Amazon's lawyer argued that Saks improperly pledged its flagship Fifth Avenue store in Manhattan as collateral for a $1.75 billion loan allowing it to operate during bankruptcy. The lawyer said that property had already been collateralised to guarantee Saks' payments to Amazon under their partnership.

The partnership also faced resistance from Saks' top luxury brands, according to two sources familiar with these brands' thinking. The brands feared that selling on a mass-market e-commerce site would dilute their positioning. The sources said it was likely the brands would use bankruptcy negotiations to push back on the deal.

An Amazon spokesperson said the company's luxury store continues to offer a wide selection of high-end designer styles. "We're adding more luxury brands regularly," the spokesperson told Reuters.

The move comes as Saks Global undertakes a broader restructuring of its operations. Last week, the company announced plans to close 62 of its off-price operations, including 57 Saks OFF 5th stores and all five Neiman Marcus Last Call stores. Just 12 Saks OFF 5th locations will remain open to serve as a selling channel for residual inventory.

Geoffroy van Raemdonck, Saks Global's new chief executive, said the company is taking decisive steps to realign its business. "As we advance on Saks Global's transformation, we are taking decisive steps to realign our business to better serve our luxury customers and drive full-price selling across our core luxury businesses," he said.

The bankruptcy filing came barely a year after a deal intended to create a luxury powerhouse brought Saks Fifth Avenue, Bergdorf Goodman and Neiman Marcus under the same roof.

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