Marketplace Morning Report – "What happened to Saks?"

Date: January 15, 2026
Host: David Brancaccio
Featured Reporter: Kimberly Adams

Episode Overview

This episode centers on the surprising bankruptcy filing of the parent company of several luxury department stores—Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman. Despite affluent Americans having money to spend, these flagship luxury brands face deep financial trouble. The show explores key factors behind the bankruptcy, including changing consumer habits, shifting luxury brand strategies, and increased competition. The discussion also briefly touches on global markets and U.S. policy developments but focuses primarily on the retail segment’s evolving dynamics.

Key Discussion Points & Insights

1. The Paradox: Why Are Luxury Stores Struggling?

• Host David Brancaccio sets the stage by questioning why luxury department store chains are faltering when higher-income consumers reportedly remain financially strong.

  • “Why are fancy store chains falling into bankruptcy when richer shoppers have money to spend?” (00:01)

• Bankruptcy Context:

  • Parent company of Saks, Neiman Marcus, and Bergdorf Goodman filed for Chapter 11 bankruptcy, aiming for reorganization rather than liquidation.
  • Higher-income consumer resilience is contrasted with the stores’ declining fortunes.

2. The "Aspirational Shopper" Dilemma

• Kimberly Adams explains that luxury buyers fall into two groups:

  • The ultra-wealthy, unaffected by price.
  • "Aspirational shoppers"—those who strive to occasionally buy high-end goods.
    • Shika Jain (Lead Partner for North American Retail, Simon Kutcher) clarifies:
      • “When it comes to luxury, you know, Saks Fifth Avenue, Neiman Marcus, other players like that are more what I would call in the aspirational luxury.” (00:48)

• Vulnerability of Aspirational Shoppers:

  • These consumers are the most likely to cut back “in times of job insecurity and higher prices for everything from housing to health care, especially younger consumers,” says Lars Perner (USC's Marshall School of Business). (00:59)
  • Many middle incomes have suffered, putting luxury shopping out of reach.
    • “Many of the incomes have taken more of a hit, so they haven't had the same opportunities to get into luxury products that they would have had when times were better.” (01:19)

3. Rising Competition from Luxury Brands’ Own Stores

• Marie Driscoll (Retail Expert, Driscoll Advisors) outlines a key shift:

  • Luxury brands like Dior, Chanel, and Louis Vuitton increasingly open their own boutiques, drawing customers away from department stores.
    • “What has happened in the last 20 years is many of the luxury brands have opened up their own stores like Dior, Chanel, Louis Vuitton.” (01:39)

• How Department Stores Can Compete:

  • Driscoll advises department stores to double down on creating luxury experiences, even for shoppers making smaller purchases.
    • “…department stores will have to lean into the idea of offering those aspirational shoppers a luxury experience, even if they’re in the store for a budget purchase.” (01:46)

Notable Quotes & Memorable Moments

• Shika Jain on Saks as "aspirational luxury":
  • “When it comes to luxury, you know, Saks Fifth Avenue, Neiman Marcus, other players like that are more what I would call in the aspirational luxury.” (00:48)
• Lars Perner on middle income challenges:
  • “Many of the incomes have taken more of a hit, so they haven't had the same opportunities to get into luxury products that they would have had when times were better.” (01:19)
• Marie Driscoll on brands going direct:
  • “What has happened in the last 20 years is many of the luxury brands have opened up their own stores like Dior, Chanel, Louis Vuitton.” (01:39)
• Driscoll on staying relevant:
  • “…department stores will have to lean into the idea of offering those aspirational shoppers a luxury experience, even if they’re in the store for a budget purchase.” (01:46)

Timestamps for Key Segments

• Bankruptcy Announcement & Context – 00:01
• Aspirational Luxury Segment – 00:34-01:19
• Direct-to-Consumer Competition – 01:30-01:46
• Advice for Department Stores’ Survival – 01:46-02:07

Overall Tone & Takeaway

The episode’s tone is analytical and concise, with a businesslike approach characteristic of Marketplace. The segment highlights how cultural and economic shifts—not just raw consumer spending—are upending established luxury retail. Department stores must adapt quickly, focusing less on exclusivity and more on elevating in-store experiences in a world where luxury brands now reach shoppers directly.

For further details, listen to the episode for the full Marketplace analysis and insight.