Bankrupt luxury retailer Saks Global received court approval Friday in Texas to begin closing procedures at nine of its flagship stores and continue the liquidation of its off-price e-commerce inventory as part of its Chapter 11 plan to rationalize the company's operating footprint.

During a virtual hearing, U.S. Bankruptcy Judge Alfredo R. Perez permitted Saks to enter into liquidation consulting agreements with GA Retail Solutions for eight Saks 5th Avenue locations and a single Neiman Marcus store that will see going-out-of-business sales conducted before they are closed for good.

Counsel for Saks, Betsy L. Feldman of Willkie Farr & Gallagher LLP, told the court the debtors decided to break off this motion from the previous bids for similar relief to preserve the image of the business to the public.

"Why not seek approval in a single motion a couple of weeks ago?" Feldman said. "The rationale for closing the off-price stores in our last motions was very different from the rationale for closing these nine full-price stores."

"We needed time. It was very important from a brand perspective," she added, explaining that Saks did not want media reports that could be interpreted as the entire enterprise going out of business.

The relief will be largely similar to that earlier approved for the debtors' Saks Off 5th e-commerce platform, with employee bonuses being reserved for final approval of the motion, she said. Saks will have the ability to add more store locations to the closing list by providing seven days' notice, Feldman told the court.

Judge Perez granted interim approval for the motion and scheduled a final hearing for March 2.

Also at the hearing, an attorney representing Saks Off 5th, Michael K. Riordan of Bradley Arant Boult Cummings LLP, said after the court provided interim approval of a liquidation sale consulting agreement with GA Retail Solutions LLC last month, the digital debtors engaged in negotiations with unsecured creditors that enabled the final order to be entered without objection Friday.

The key changes made to the final order following talks with the official committee of unsecured creditors included adding consultation and noticing rights to the committee for any changes proposed to the consulting agreement going forward, and provide the group with the opportunity to object to any of those changes, Riordan said.

Judge Perez also granted final approval to the main debtor's store closing consulting agreement with GA Retail Solutions covering 34 Saks Off 5th physical locations and the last five of its Neiman Marcus Last Call stores. Following an initial approval to enter into the agreements, Feldman said the closing sales have been going smoothly.

Final approval came with permission to pay bonuses to hundreds of employees working at the closing locations, as well as Saks' corporate levels, totaling about $5 million for 800 workers. Store-level employees will also be eligible for incentive-based bonuses tied to sale targets for each store, Feldman added.

Saks Global filed for bankruptcy Jan. 14 with about $3.4 billion in funded debt after struggling to deal with the debt it took on to purchase Neiman Marcus more than a year ago.

It entered Chapter 11 with about $1.75 billion in committed financing from its creditors. Judge Perez on Jan. 14 allowed Saks to access about $500 million in funding as part of an interim order authorizing its debtor-in-possession financing.

Saks Global is represented by Jennifer J. Hardy, Debra M. Sinclair, Robin Spigel, Allyson B. Smith, Betsy L. Feldman, Jessica D. Graber and Ryan Blaine Bennett of Willkie Farr & Gallagher LLP and Kelli Stephenson Norfleet, Kenric D. Kattner, Arsalan Muhammad, Kourtney P. Lyda and David Trausch of Haynes Boone.

The SO5 debtors are represented by Jarrod B. Martin, Michael K. Riordan, Raneen I. Abdelghani, Asiya Khan and James Bailey of Bradley Arant Boult Cummings LLP.

The official committee of unsecured creditors is represented by Ian R. Phillips, Seth Van Aalten and Justin R. Alberto of Cole Schotz PC and Lorenzo Marinuzzi, Doug Mannal, Theresa Foudy, Raff Ferraioli and Miranda K. Russell of Morrison Foerster LLP.

The case is In re: Saks Global Enterprises LLC et al., case number 4:26-bk-90103, in the U.S. Bankruptcy Court for the Southern District of Texas.