The Risks and Benefits of Selling to Saks, According to Gary Wassner

The factor feels designers’ pain but continues to support the new luxury tie-up, which includes both Saks Fifth Avenue and Neiman Marcus.

There are few people as plugged in to the daily give-and-take of financing high fashion as Gary Wassner, chief executive officer of Hilldun Corp.

For generations, the factoring company has helped smooth out the cash flow for brands, paying them immediately for their orders shipped to retailers and then going back and collecting on the bills.

It’s a gig that gives Wassner unusual insight into what vendors are shipping and how likely retailers are to pay.

Lately, it’s been Saks Global that’s dominated not just the cocktail party conversation in fashion, but Wassner’s work life as brands digest the company’s new 90-day payment terms, plans to pay past-due bills, the integration of Neiman Marcus and Bergdorf Goodman and more.

“It literally takes up 25 to 30 percent of my day every single day,” Wassner told WWD. “I should be on Saks’ payroll.”

He, of course, is not on Saks’ payroll, but he certainly is an interested party.

Hilldun factors “well over” 120 brands that sell to Saks Fifth Avenue. On top of that there are another 15 to 20 brands that sell to Neiman’s, with many brands selling to both companies.

Wassner is the one signing off on orders and paying brands up front and fielding queries from vendors.

“All day long,” is how he described the churn. “And it’s not just a matter of calming the brands down. They want us to approve their orders before they ship because they can’t afford to lose that money.

“My inbox has a hundred emails a day from brands asking me if I can approve their orders today, and this is every day,” he said. “We’re working closely with Saks. I’m trying to get out the merchandise that they need the most as well as to accommodate our clients. It’s extremely important for them to ship the goods out for their own financial stability.”

And while other factors have walked away from Saks — and Neiman’s now that it sits under the same corporate umbrella — Wassner said it is still a good bet to approve those orders.

It’s a vital connection for Hilldun, for Saks and for the vendors — and it relies on the long-standing relationship Wassner has built with Saks, which is led by chief executive officer Marc Metrick and executive chairman Richard Baker.

“We have a long history with Saks, of trust and promises that were never broken to us,” Wassner said. “We’ve worked with them throughout the past two years, knowing full well that their liquidity was not what they wanted it to be, and yet every single week they paid us. Every single week they promised and the promises came true. So we have a relationship that is different than the other factors in the other banks.

“They’ve kept us informed all along when they were raising money, when this acquisition was going to happen, etc., etc., and everything came to fruition as they expected,” he said.

While Wassner has continued to support Saks, he is keenly aware of the position brands find themselves in.

Since the merger, Saks and Neiman’s have said they would start paying vendors in 90 days, instead of the 30 days that is more common. The company is also paying back its unpaid bills in 12 monthly installments, starting in July.

Taken together, that’s a huge burden for small designers that rely on Saks and Neiman’s.

“Even putting orders into work for Saks is very difficult and challenging and frightening for some smaller brands, even the larger independent brands, it’s just as challenging,” Wassner said.

He said Saks is now in a better place than it was during the lean 18-month stretch before the $2.7 billion deal to buy Neiman’s closed in December.

But vendors remain on edge. Saks is now carrying $2.2 billion in senior secured notes with a $1.8 billion asset-based lending facility. Standard & Poor gave Saks a credit rating of “CCC-plus” and has said, while the retailer has enough money to operate now, it needs to cut costs and has an “unsustainable” capital structure.

Fashion was ready to be done worrying about Saks.

“I think everyone expected when the acquisition completed that they would be flush with money,” Wassner said. “Everybody would be paid in full and life would go back to normal.  But life is not normal and retail is not normal. So it’s a matter of building back a strong company.”

Wassner said brands had been pushing for some kind of visibility.

“‘Tell us what the payment plan is, give us something that we can count on,’” Wassner said, summing up the vendor sentiment. “What Marc Metrick was trying to do was respond to those requests for a plan and he gave them a plan that they could count on. Unfortunately, many of the brands didn’t like the plan. They weren’t happy with it, even though it provided them with payment sooner than they’ve been getting it in the past two years.

“I think what Saks didn’t realize is the pressure that later payments — 90-day terms and past-due items being paid over 12 months — the pressure that puts on the cash flow of smaller businesses who have already paid for the merchandise, who have payroll, who have fabric to pick,” he said. “It’s very hard [for small designers]. They don’t have cash reserves.”

Wassner said the message has gotten through to Saks.

“I believe that they will work more closely with some of these brands in order to make it possible for them to work in a healthy way,” he said.

And Saks in the meantime is racing to cut costs — realizing synergies from the merger — and establish itself anew.

Part of that includes some kind of a presence on Amazon, which was a partner in the deal to buy out Neiman’s.

“We’ve known for years Amazon wanted to be in the luxury space,” Wassner said. “They failed multiple times. I think the reason they failed is because they didn’t separate Amazon luxury from Amazon. Shopbop is owned by Amazon and they’ve never had an identity crisis.

“So if Amazon can properly market a Saks luxury platform, then I think they’ll do very well,” he said. “Why wouldn’t people buy Saks via the Amazon network as opposed to Net-a-porter or Mytheresa or anyone else online?”

At best, Saks is in a period of metamorphosis and will come out the other side with its luxury leadership position solidified, its bills paid and a new angle on a new consumer world.

“The brands have to recognize that Saks is a business like anybody else’s business and they too need liquidity and need cash flow and they have to do what they have to do in order to achieve the goals,” Wassner said. “If they do, a year from now, we’re all going to be looking back and saying, ‘Wow, it was really difficult, but we got there and now we have a great retailer that leads the luxury space and we can move forward in a healthy manner.’

“Everybody has to take risks in their business,” Wassner said. “The question is how much, and that’s up to each individual. These are executive decisions that each company has to make.”

For his part, Wassner said he’s signing off on orders to Saks every week.

“We can’t always approve them the day the client asks for them, but we’re certainly trying to get them approved for our clients prior to their cancel dates,” he said. “And when we can’t, we’re candid with our clients and we tell them, ‘Go to your buyer, ask for an extension. Maybe next week or the week after, we’ll have credit availability and we’ll approve it.’

“It really has to do with how much risk we’re willing to take and how comfortable we are with the size of the credit line we’re giving to Saks Global,” Wassner said.

And in that regard, Hilldun is a lot like everyone else betting on Saks’ transformation

By Evan Clark

March 27, 2025, 4:26pm