When Strategic Bets Unravel | Amazon's Saks Investment & Risks of Retail Partnerships

Luxury retailer Saks filed for bankruptcy last week under $3 billion in debt, leaving Amazon with a total loss on its equity stake and an uncertain path to recovering any portion of a $900 million revenue-sharing deal. The collapse also hit Salesforce, major financial institutions, and bondholders who invested $600 million last summer in bonds now largely worthless. While the strategic thesis behind Amazon's investment was sound—online luxury sales are projected to reach a third of the market by 2030—execution failures and unsustainable debt loads brought Saks down. For tech giants, the episode highlights how layered partnership structures can compound losses and how bankruptcy financing can subordinate earlier protections.

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