What will replace the Saks Fifth Avenue at Canal Place? | Business News

As Saks Fifth Avenue prepares to close its Canal Place store, attention is turning to what comes next for the three-story anchor space in New Orleans’ most prominent shopping center.

The store is slated for closure as part of parent company Saks Global’s bankruptcy restructuring, opening up about 75,000 square feet of prime commercial real estate at the foot of Canal Street. Saks representatives said it is expected to remain open through the end of April. 

Securing a suitable successor to Saks — the mall’s lone anchor tenant for the past 43 years — is a high-stakes decision with repercussions for the city. Canal Street, once the city’s preeminent shopping corridor, has struggled since the 1990s with the departure of department stores and specialty retailers, including, most recently, the closure of Palace Cafe last year and the impending exit of Adler’s jewelry store.

City leaders, including Mayor Helena Moreno, and Canal Place officials have said finding another high-end tenant for the space is a top priority and that they are already working on leads.

Retail experts say that, given the dwindling pool of luxury retailers in an era of e-commerce, it won’t be easy.

“We’ve done enough leasing in the last 10 or 20 years to know that if the nice, fancy retailer leaves, you’re not going to have one right behind it,” said Jonathan Walker, senior commercial sales and leasing executive at Maestri-Murrell. “There’s just not a ton of high-end retailers that are calling us right now saying, ‘Hey, we need space in your market.'”

‘No one intends to close’

Saks Fifth Avenue currently occupies nearly 30% of the retail portion of the mixed-use Canal Place development, which also includes a hotel and office tower under separate ownership. The Shops at Canal Place, the retail portion of the development, is currently 90% leased. 

Saks’ departure will leave the mall with two, vacant multi-story storefronts and a vacancy rate of nearly 30%. In November 2025, Anthropologie moved out of its spot at the corner of North Peters and Iberville streets and opened a new store at Lakeside Shopping Center in Metairie.

Peter Bergner, managing director of development for the mall’s owner, New York-based O’Connor Capital Partners, said he does not expect the Saks closure to trigger additional departures.

“The tenants in the mall do very well,” Bergner said. “We’ve spoken to all of them, and no one intends to close.”

Once Saks shuts its doors for good, Bergner said management will renovate or reconfigure the space before a new tenant moves in. He couldn’t say how long the space will remain empty.

“It depends upon work that the new tenant — or tenants — need to get done,” Bergner said. “It’s our goal to have somebody in there as quickly as possible.”

Bergner declined to say how many possible tenants have expressed interest in the Saks space or how much revenue the store generated, though he noted that the company’s financial distress was evident long before it filed for bankruptcy protection.

“We were totally cognizant that they were having financial problems,” he said.

Another lone anchor?

When Saks Fifth Avenue made its New Orleans debut in 1983, the Canal Street retail landscape included more than half a dozen luxury department stores. In the wake of Katrina, it was the sole downtown department store to reopen, rebuilding after suffering an estimated $20 million of damage in a fire. Today, several former luxury retailers on Canal have been converted to condos or hotels. And, nationally, only a handful of department store chains are still in business.

As online shopping has reshaped retail patterns in recent years, many mall owners have leaned into more experiential concepts like fitness centers, medical clinics or entertainment venues to fill holes left by departing anchor tenants. These days, discount stores like Burlington and Five Below are the main clothing stores leasing large vacant spaces, which is one of the biggest challenges Canal Place will face, Walker said.

“Let’s be honest, trends change. You can’t expect [Saks], just because they were an awesome retailer in the ’80s, ’90s, 2000s, to be there forever,” he said. “This is real estate, it’s ever-changing, so the fact that they were there for that long is pretty amazing.”

Though Canal Place owners have vowed to move fast to replace the store, Kirsten Early, director of retail with SRSA Commercial Real Estate, said that, realistically, it will take time.

“The goal will be to secure the right tenant, one that drives traffic and enhances the overall shopping environment,” she said. “Before that happens, the space needs to be vacated and properly marketed.”

“An 18-month timeline would not be unusual for a transaction of this scale,” she added.

Another consideration is whether to keep the space with three stories of enclosed retail space connected by escalators or to subdivide it and lease it to multiple tenants.

“It’s more likely that a single, strong retail user backfills the location,” Early said, noting that it may make sense to find a complementary use for the third-floor space, currently the site of the Saks menswear and shoe department.

But should the perfect tenant appear, mall management could decide it’s worth the cost to subdivide the space and lease it out separately.

“If they need one story, you’ll find a way to make it work. If they need two, if they just want to be on top, you’ll make it work,” Walker said. 

Bergner said subdivision of the Saks space was possible, though not inevitable.

Canal Street

While the Saks departure is a blow to Canal Street, the lower end of the thoroughfare — and its surrounding neighborhood — has seen billions of dollars in new investments in recent years. Projects include a $435 million transformation of Caesars New Orleans that included a new casino hotel, improvements to the Port of New Orleans’ cruise ship terminal, now the nation’s sixth largest, and plans by the Audubon Nature Institute to connect Goldring Woldenberg Park, which begins at the foot of Canal next to the Audubon Aquarium, to a new downriver park at the Gov. Nicholls Street and Esplanade Avenue wharves.

Also nearby is the Four Seasons luxury hotel and condominiums, which opened in 2021. And a new initiative, Celebrate Canal!, led by civic leader Sandra Herman, is focused on how to revitalize vacant storefronts along the avenue.

Herman and several downtown business leaders did not respond to requests seeking comment about what the Saks closure means for Canal Street or what might come next.

Seth Knudsen, CEO of the Downtown Development District, said the Adler’s and Palace Cafe closures are unrelated to Saks’ decision, which is the result of a corporate bankruptcy.

“Overall on Canal Street, the occupancy is pretty high and pretty stable,” Knudsen said. “The spaces that are vacant, we generally know the reasons, and it’s not that there’s a consensus that it’s not possible to have a successful business on Canal Street.”