The parent company of Saks Fifth Avenue has agreed to acquire rival luxury department store Neiman Marcus.
Lynne Sladky/AP
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Lynne Sladky/AP
A luxury retailer is making its own high-end acquisition: Saks Fifth Avenue’s parent company is buying Neiman Marcus for 2.65 billion dollars, in a merger that would create a dominant luxury department store in the U.S.
HBC, the owner of Saks and Canadian chain Hudson’s Bay, has agreed to buy Neiman Marcus, which also owns Bergdorf Goodman. Amazon will take a stake in the new combined company, which will provide technology and logistics as part of the deal. Another technology partner, Salesforce, will also be a minority shareholder. Saks.com CEO Marc Metrick will lead the new combined company, Saks Global.
Saks and Neiman Marcus have long considered the idea of joining forces to tackle a changing market. Neiman was the first department store to file for bankruptcy at the start of the pandemic, only to later resurface under new ownership from investment firms.
Both chains are under pressure, especially from luxury brands that are increasingly turning to department stores, engaging directly with consumers and opening their own stores.
“For years, many in the industry have anticipated this transaction. … This is an exciting time in luxury retail, with technological advances creating new opportunities to redefine the customer experience,” HBC CEO Richard Baker said in a statement, touting a plan to use artificial intelligence to create personalized shopping experiences online and in stores.
Luxury shopping boomed as pandemic-weary shoppers splurged on expensive handbags, outfits and skincare. But the shopping spree has now cooled, with many of those purchases now being made online.
Rival Macy’s, which owns Bloomingdale’s, has been closing stores and focusing more on its luxury business, and is under intense pressure from activist investors to revive its flagging 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 recently filed a lawsuit to block several high-profile deals between industry leaders. That includes the mergers of the two largest grocery chains, Kroger and Albertsons, and another luxury merger: Tapestry, which owns the Coach and Kate Spade brands, is seeking to buy Capri Holdings, which owns the Versace and Michael Kors brands.
Saks Fifth Avenue has 39 stores in North America plus numerous off-price stores called Saks Off 5th. Neiman Marcus has 36 stores plus two Bergdorf Goodman locations.