Key Highlights
The Saks-Amazon Split: A Luxury Retailer’s Strategic Shift
Not always. You might think this is new, but…
This week’s news that Saks Global plans to wind down its eCommerce partnership with Amazon is just the latest in a series of strategic moves by the bankrupt department store company.
A Turbulent Partnership
The arrangement between Saks and Amazon had already been strained when Saks filed for bankruptcy last month. Despite the retailer’s reluctance to exercise its right under Chapter 11 to reject the deal, it seems clearer now that the partnership isn’t working out as planned.
According to a source familiar with the matter, the Saks on Amazon storefront saw limited brand participation and is being shut down so that Saks can focus on sections of its business it views as providing greater potential for growth. “The company feels it would be better served driving traffic to its own website,” said the source.
Bankruptcy Filing and Struggles
Saks declared bankruptcy January 14, 2026, amid mounting debts, saying it was now evaluating its operational footprint. The decision came barely a year after Saks Fifth Avenue, Bergdorf Goodman, and Neiman Marcus were merged into one entity.
In its bankruptcy filing, Saks said its off-price division was a financial drag on the company, with Saks Off 5th projected to lose $139 million in fiscal year 2025. As part of its downsizing strategy, Saks is preparing to wind down most of its off-price operations.
Amazon’s Response and Broader Implications
An Amazon spokesperson told Reuters that beyond the Saks experience, the luxury store continues to offer a wide selection of high-end designer styles. “We’re adding more luxury brands regularly,” said the spokesperson. Meanwhile, Saks declined to comment when reached by the news outlet.
This move underscores broader structural challenges in the brick-and-mortar sector as physical department stores lose their competitive “anchor” status to digital spaces and AI agents. Luxury store counts are expected to decline, but analysts suggest the resulting vacancies may yield expansion opportunities for off-price and beauty retailers this year.
So, what does this mean?
It’s another example of how traditional retail is adapting in a digital age, with companies like Saks looking to streamline their operations and focus on more profitable areas. The Saks-Amazon split might be just the beginning of similar moves by other luxury retailers facing tough times.
At least, that’s the plan.