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

New York Fashion Week!

Reviews by Gary Wassner

(click the link below)

FGI Communiqué – full details here

Gary Wassner on the hopeful return of a live fashion week as the U.S. opens back up

Gary Wassner / July 12 2021
Full article available on WWD.com here

Yes, it’s time. Our country has managed to navigate this frightful pandemic better than most others, aside from our horrific death toll of 600,000. Despite this horrendous statistic, we have much to be thankful for. New York now has the lowest positivity rate in the entire country. And so we have begun to focus on a live New York Fashion Week once again. Or rather, American Fashion Week, as it is now being dubbed. As we’ve taken the global lead in combating the virus, we must now take the lead in the rebirth of fashion. We have the opportunity to demonstrate our strengths, and for so many reasons, New York City is the right city and it’s the right time for our incredibly talented designers to initiate the world to the unique and fresh perspectives we have always brought to the industry and hence to the consumer.

I’m a staunch supporter of American Fashion. And I’ve always believed that the most appropriate place for American brands to show the world what they do is right here. We suffered an exodus over the past years that disturbed me greatly. And there was subsequently significant talk about the weaknesses in our show lineup. It was unfortunate that NYC was not the venue of choice for all American brands then. But what goes around comes around, and many designers have chosen to return to NYC this September. What they deemed to be greener pastures in prior years have browned somewhat now. The calendar will once again be full with talent, both new and established. In addition, the week will culminate in the Met’s Costume Institute Ball, an event that now attracts the eyes of the entire world.

As consumers transition from what they need to what they desire, our designers have a unique opportunity to provide them with whimsy, beauty and cool, and to showcase the best that America has to offer. Give us fashion! Real fashion. Not derivative, not logo-driven, not a fallback on heritage and history, but newness, positivity, edgy creativity, inclusivity and individuality. Many of the major European brands, ruled by the conglomerates that own them, have been trying way too hard to be relevant, while still utilizing the trends that we developed here. Clothing emblazoned with huge logos and branding is not our strength. We don’t sell product because of a name we might splash across the leg or chest. American designers who don’t fall back upon in-your-face branding, but rather forge ahead on design elements are showing, not telling, the world what fashion is. They are showing us the way with design, not shouting at us with words. Many of our best American designers brand themselves by silhouette (Thom Browne) or singular and unique proportions (Rick Owens) or with repurposed and anti-trend, smart clothing (Yeohlee’s all black collection in the age of feminine prints, Greg Lauren’s beautiful tapestries of multifarious textiles), tough chic (R13’s brilliant juxtapositions of hard and soft), beautiful, feminine, boho chic (Ulla Johnson’s textural combinations and flawless consistency), and truthful, modern, evolved and luxurious, effortless street wear, (Joey Lorenzo’s Fear of God).

How many American brands do you see emblazoning their products with oversized lettering announcing who they are? Not many. We do not chase style here. We set it. Our younger brands inspire us with newness and an obvious and outspoken indifference to global trends. And our mature brands continue to deliver modern iterations of who they are and what has made them enduring. What could be more appropriate and inspiring today than novel directions taken during our rediscovery that help and guide us toward what we actually want? We’ve all undoubtedly been changed by the pandemic, and we are bursting with recently unfulfilled needs. What better way to express our moods and feelings than with our apparel choices? I fully expect that the runways of NYFW will be rife with creative and inspiring ideas that have been germinating during our 15 long, dark months of lockdowns and isolation. And I fully expect to be thrilled by the innovations and new directions, distilled from the choices foisted upon us by our recent circumstances and presented without backward glances, but rather with forward-thinking, unique perspectives.

As the sun finally rises again on our country, NYFW should be a beacon of hope, inspiring us and bringing smiles to our faces once more. Give us the palettes and the paints to help us re-create our lives. As music led the social revolutions of the ’60’s and ’70’s, let fashion provide today’s voices of individuality, diversity, sustainability and inclusivity. And let it begin here, this September in NYC.

Gary Wassner is chief executive officer of fashion factoring company Hilldun Corp. and chairman of Interluxe Holdings.

Hilldun’s Gary Wassner sat down with the Daily Front Row to talk about his views on the future of the fashion industry.

Read the full article on The Daily Front Row here.

Hilldun’s @gary-wassner was interviewed in today’s Business of Fashion article.

https://www.businessoffashion.com/articles/retail/what-to-do-when-retailers-dont-pay

Hilldun’s Gary Wassner wrote a fantastic article for the CFDA. Check it out here:

https://cfda.com/news/protecting-the-health-of-your-business