Saks owner acquires Neiman Marcus, creating a luxury retail giant
In a move that would further consolidate the luxury retail market, the parent company of Saks Fifth Avenue has agreed to acquire Neiman Marcus in a $2.65 billion deal, creating the ultimate high-end department store behemoth, the companies announced today.
The deal, which had been rumored since Neiman Marcus filed for bankruptcy protection during the COVID-19 pandemic, comes just over four years after Saks bought the license for the Barneys name following the bankruptcy of that group.
It also follows a wave of luxury e-tail failures, including those of FarFetch and Matches.com. Saks is owned by HBC, a retail conglomerate that bought the American chain in 2013 — the year after HBC also acquired Lord & Taylor.
“Customers love to go to a store,” Richard Baker, the chief executive and chairman of HBC, told The New York Times. “They live to touch a product and spend time with their personal shoppers.”
The acquisition of Neiman Marcus makes Saks Global, as the new group will be called, the dominant player in its market, with a combined 75 stores (including two Bergdorf Goodman locations), as well as 100 off-price outlets. The new group’s only real rivals in the United States will be Macy’s, which also includes Bloomingdale’s, and Nordstrom. It will be run by Marc Metrick, the current chief executive of Saks and Saks.com.
The companies said they planned to invest in technology, including artificial intelligence, as well as legacy and emerging brands.
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“Saks has remained steadfast in our commitment to be at the forefront of luxury fashion, meeting customers not just where they are but where they are going,” Metrick said.
The two retailers have long been viewed as potential matches, given their overlapping customer bases of high-end customers. But each has struggled financially, posing significant complications for their efforts to combine over the years.
What may have helped seal the deal is some help from Amazon, which is taking a minority stake in Saks Global. HBC, which also owns Canadian department store chain Hudson’s Bay, is financing the acquisition with $2 billion it has raised from existing investors, while affiliates of the investment firm Apollo Global Management are providing $1.5 billion in debt.
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This article originally appeared in The New York Times.
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