The parent company of Saks Fifth Avenue has agreed to acquire rival luxury department store Neiman Marcus.
Lynne Slutkey/AP
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Lynne Slutkey/AP
A luxury retailer is making its own high-end acquisition: The parent company of Saks Fifth Avenue is buying Neiman Marcus $2.65 billion, Merger would create a dominant upscale department store in the U.S.
HBC, owner of Saks and Canadian chain Hudson’s Bay, has agreed to acquire Neiman Marcus, which also owns Bergdorf Goodman. Amazon will take a stake in the newly formed company and will provide technology and logistics as part of the deal. Another technology partner, Salesforce, will also become a minority shareholder. Marc Metrick, head of Saks.com, will run the combined company, Saks Global.
Saks and Neiman Marcus have long weighed the idea of joining forces to respond to a changing market. Neiman Marcus was the first department store to go bankrupt at the start of the pandemic, only to emerge under new investment firm owners.
Both chains are facing pressure, especially from luxury brands, which are increasingly flexing their muscles in department stores, connecting directly with shoppers and opening their own retail stores.
“Many in the industry have been anticipating this deal for years. This is an exciting time in luxury retail, with technological advancements creating provides new opportunities to redefine the customer experience.” He also touted a plan to use artificial intelligence to create personalized shopping experiences online and in stores.
Luxury shopping has surged as pandemic-weary shoppers splurged on high-end handbags, clothing and skin-care products. But now the shopping frenzy has cooled. Nowadays these purchases are often made online.
Rival Macy’s, which owns Bloomingdale’s, has been closing stores and shifting its focus more toward its luxury goods business, facing calls from activist investors to turn it around. Huge pressure on declining business. Meanwhile, the family that owns Nordstrom is trying to take the company private.
The merger is likely to face intense scrutiny from federal regulators, who have recently filed lawsuits to block several high-profile deals between market leaders. These include the merger of two top grocery chains, Kroger and Albertsons, and another luxury merger: Tapestry, which owns Coach and Kate Spade brands, wants to acquire Capri Holdings, which owns Versace and Michael Kors brands.
Saks Fifth Avenue has 39 stores in North America, as well as many discount stores called Saks Off 5th. Neiman Marcus has 36 stores and two Bergdorf Goodman locations.
