Bufetico
In January, Fisayo Che had an order sitting in her warehouse that was supposed to go to Saks Fifth Avenue within a couple of weeks, and she’d already decided not to send it.
Che gives Saks a lot of the credit for her brand’s growth. She launched Elisamama, a Nigerian-inspired clothing line, in 2020. It started with kids’ clothes and moved into women’s in 2021 with the store’s support. In 2023 Saks picked it for its New Wave program for emerging designers, which came with mentorship and a grant. Saks became her largest customer, 50 to 60 percent of the business.
By 2025 Saks wasn’t paying her on time. Its parent, Saks Global, had taken on a lot of debt to buy Neiman Marcus in 2024, and it owed its suppliers millions. In February 2025 it promised to pay the old balances in monthly installments starting in July. Che got paid through August. After that she shipped two more batches, hoping something would change. Saks Global filed for bankruptcy on January 13, 2026, and two weeks later Modern Retail reported that Che was out six figures.
She raised the obvious question herself: why let the balance get that big and keep shipping? Her answer was that Saks had shown commitment to her brand and holds a really important place in luxury fashion. When one store is half your business or more, you don’t walk away from it lightly.
She had company. A lawyer who represents about 30 brands owed money by Saks told the Associated Press that for some of them, Saks had been their only big store account. In the same story, the AP reported bare spots on the shelves at the Manhattan flagship, handbags and shoes included.
What working capital is
A sale shows up in the profit the day the goods go out the door. The cash shows up the day the customer pays. Until then the money waits on a line called accounts receivable, what customers still owe you, and that’s where Che’s six figures were sitting.
Take what customers owe you, add the goods on the shelf, subtract the bills you haven’t paid. That’s working capital, the cash tied up in running the place day to day. When it grows, it eats cash the profit line doesn’t show, at least not yet. Che had money stuck in both: what Saks owed her, and the order in her warehouse. And when a customer can’t pay, the receivables line is where the trouble shows up first. The profit line admits the loss later, when the company books it as a bad debt.
The same lines at the big companies
Big companies get caught the same way, just with more zeros. In the year that ended in May 2022, Nike’s profit went up to $6,046 million, while its cash from operations, the money the business brought in, fell to $5,188 million. The difference was sitting in boxes: inventory went up 23 percent, and Nike’s own filing blames longer shipping times, which left more goods in transit at any moment, plus a COVID flare-up in Greater China. That’s product Nike owned and hadn’t sold.
Costco is Che’s problem in reverse. Its members pay at the register, and it’s the suppliers who wait, on terms they agree to. At the end of August 2025 Costco owed them $19,783 million against $18,116 million of goods on its shelves, so its suppliers were carrying all of its inventory, and then some. On that date, stocking the shelves took none of Costco’s own money.
What Costco owes its suppliers sits on a line called accounts payable, the one readers tend to skip. Paying later works like a loan from them, and it lasts as long as they’re willing to wait.
Saks pushed that line past its terms. Gary Wassner, whose firm covers about 120 brands that sell to Saks in case the store doesn’t pay them, told the AP that management had changed the payment terms for the brands supplying the stores. In the sworn statement it filed with the bankruptcy court, the company said it began extending its payment terms, the time it gets before a bill is due, early in 2025. For a while, that keeps cash in the building, and every dollar of it is a dollar some supplier is still waiting for. Che’s six figures were some of them.
How I read it
I look at three lines, and at how each one moves from one year to the next against sales. If inventory grows much faster than sales, something didn’t sell. If sales are flat and receivables jump, somebody isn’t paying, or the company is letting customers pay later to keep the sales coming. That’s Che’s side. If payables grow faster than sales, the company is paying its own suppliers later, which is Saks’s side. The cash you keep by paying late comes in once, and after that the suppliers either keep waiting or stop shipping. All three show up in cash from operations before they show up anywhere else.
Where this breaks
Working capital swings back, so one year of it tells you less than it seems to. Nike’s pile had been sold down by 2024, and in its 2026 fiscal year the jump was on the other line, in what it was owed, mostly a refund from the government that hadn’t arrived when the year closed. A year when working capital hands you cash says even less, because cash squeezed out of suppliers once can’t be squeezed out again. Seasons get in the way too, and companies don’t all draw these lines in the same place, so I compare a company with itself, at the same point in the year. The textbook version counts everything that turns into cash within a year, cash included, against everything due within a year. I stick to the three lines that move with the business.
Stretched payables are usually a symptom. At Saks, some suppliers were already being paid late before the Neiman Marcus deal, and the debt from it and a drop in sales made it much worse. In the same sworn statement, Saks blames its own systems for part of the goods it never got in the second half of 2025: merging the merchandising software at Neiman Marcus and Bergdorf Goodman disrupted deliveries there. And Costco’s version isn’t something any company can copy by wanting to. It works because the goods turn over in weeks and people pay at the door.
The order in the warehouse
Che’s rule was plain: “The only way we will send it is if they pay first.” Other brands had gotten there before her. Wassner had advised the brands he works with to stop shipping to Saks starting December 19. And in that same sworn statement, the company said the late payments had damaged its trust with the brands that supplied it, and that they’d put limits on how much it could owe them.
So before it filed, the company that began 2025 stretching its suppliers was paying some of them early, to stay under those limits.