The news: Saks Global has yet to make good on its pledge to resume payments to vendors, per Retail Dive, despite CEO Marc Metrick’s promise to tackle overdue balances starting in July.

• Skincare brand Sunday Riley threatened to escalate the matter to its legal department unless the department store retailer settled the account in full.
• Other brands are having a similar issue with delayed or inadequate payments, while one told Retail Dive it had given up on being repaid and would stop shipping products to Saks customers.

Money problems: Saks’ cash flow issues are a serious problem for a company with ambitions of becoming a bigger power player on the luxury scene. Suppliers’ growing ire with Saks could hurt the department store’s ability to obtain new and desirable merchandise, while also making emerging brands less interested in partnering with the retailer.

The delayed payments also hardly inspire confidence in the health of the company’s core retail business—especially given that its own surveys have found diminishing interest in luxury purchases.

Still, Saks can get back on track. The company recently finalized a $600 million financing package, which should ease some of its capital constraints.

• With the funding in place, there shouldn’t be any more complaints from brands about not getting paid, a source close to the company told Women’s Wear Daily. “You’re not going to hear from brands anymore about concerns. You’re not going to hear anymore from that side of the equation.”
• But Saks still has a hefty debt load, which could quickly eat into its newly-acquired cash reserves.

Our take: Saks’ acquisition of Neiman Marcus is looking increasingly like a costly misstep. The current environment is unfavorable to both luxury and department stores, as shoppers prioritize retailers and goods that deliver value. With numerous headwinds working against it, Saks will need to find a way to woo big spenders and reassure vendors—and investors—that it has the funds to cover its obligations.