Saks Fifth Avenue told vendors in a letter Friday that it will take more than a year to pay unpaid bills, a sign of the difficult outlook facing US department stores and the brands they work with.

Saks told vendors that it will pay past due balances in 12 monthly installments starting in July, according to the letter, a copy of which was seen by Bloomberg News. On new orders, Saks will pay within 90 days — a longer time frame than the industry standard of around two months. Saks, whose parent company acquired rival Neiman Marcus last year, had been delaying payments to vendors during the past year or so. 

After the acquisition closed in December, “our financial position is strong and our leverage is reduced, which will allow us to make investments to be a better partner to our brand partners,” Marc Metrick, chief executive officer of Saks Global, as the combined Saks Fifth Avenue and Neiman Marcus is called, wrote in the letter. 

In an interview, Metrick said the new payment terms are “for the good of the entire industry.” He added: “The model as it’s been working for the last 100-plus years needs refinement,” pointing to bankruptcies among luxury retailers in recent years, including Barneys New York and Neiman Marcus itself, as well as financial difficulties at Farfetch Ltd. and others.  

Metrick also said Saks plans to cull the number of brands it works with by around 25% during the next year. “We’re forecasting a pick-up in revenue and with fewer brand partners,” Metrick added.  

Saks is majority controlled by HBC, a holding company with retail and real estate investments that’s headquartered in New York and Toronto. The holding company also owns Hudson’s Bay Co.

The Wall Street Journal reported on the letter to vendors earlier Friday.