Amazon.com (AMZN) is facing a potential end to its “Saks on Amazon” e-commerce partnership with Saks Global, the luxury retailer that filed for bankruptcy earlier this month, Reuters reported, citing a source with direct knowledge of the matter.
The tie-up was already at risk of falling apart when the company behind Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman filed for bankruptcy protection on Jan. 14. However, Saks had yet to officially communicate that it was exercising its right to reject the deal as part of its Chapter 11 bankruptcy proceedings.
A source told Reuters on Friday that Saks will shut its “Saks on Amazon” storefront to focus on its business areas with a higher growth potential. “The Saks on Amazon storefront saw limited brand participation,” the person said, adding that the company believes it would be more beneficial if it could redirect traffic to Saks.com.
“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,” a spokesperson for the e-commerce giant said. Saks refused to comment.
The partnership, which was signed in 2024 with a $475M equity investment from Amazon (AMZN) in Saks, had also led to concerns among the company’s top luxury brands.
According to two sources familiar with their views, the companies feared that sales via a mass-market e-commerce platform would hurt their brands. The people said that the brands are likely to use bankruptcy negotiations to push back against the agreement.