Top NewsSaks acquires owner Neiman Marcus, creating a luxury retail company

Saks acquires owner Neiman Marcus, creating a luxury retail company

In a move that further consolidates the luxury retail market, Saks Fifth Avenue’s parent company has agreed to buy Neiman Marcus in a $2.65 billion deal, creating the ultimate high-end department store behemoth, the companies announced Wednesday.

The deal, which has been rumored since Neiman Marcus filed for bankruptcy protection during the pandemic, comes four years after Saks bought the license to the Barneys name following the group’s bankruptcy. It follows a wave of luxury e-tail failures including FarFetch and Saks is owned by HBC, a retail conglomerate He bought the American chain In 2013 – the year after HBC acquired Lord & Taylor.

“Customers love going to the store,” Richard Baker, HBC’s chief executive and president, told The New York Times. “They live to touch a product and spend time with their personal shoppers.”

He added: “What excites us about acquiring Neiman Marcus is the acquisition of their world-class sales force. People have forgotten how important people are. When it comes to selling luxury goods, beauty shops and salespeople need to be trusted by customers.

The acquisition of Neiman Marcus will make Saks Global, as the new group calls it, 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 competitors in the United States are Macy’s, which includes Bloomingdale’s and Nordstrom. Mark Metrick, current CEO of Saks and, will run it.

Companies have said they plan to invest in technology, including artificial intelligence, as well as legacy and emerging brands.

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“Sacks remains steadfast in our commitment to be at the forefront of luxury fashion, meeting customers not only where they are, but where they are going,” said Mr. Metric said. “With our continued focus on innovation, we are at the forefront of driving growth for our brand partners and creating career development opportunities for the incredible talent across Socks Global.”

The two retailers have long been seen as potential matches, given their overlapping customer bases of high-end customers. But each has struggled financially, causing significant problems for their efforts to merge over the years.

Some help from Amazon, which is taking a minority stake in Saks Global, may have helped seal the deal. HBC, which also owns Canadian department store chain Hudson’s Bay, is financing the acquisition with $2 billion raised from existing investors, while affiliates of investment firm Apollo Global Management are providing a $1.5 billion loan.

Mr. Baker said the company “does not plan to close any stores or digital businesses or reduce services in any way.”

Analysts said they expect retailers to be able to save by combining other costs.

“Without a doubt, there will be performance,” said Robert Burke, founder of luxury retail consulting. The real question is how brands react to this. Especially the LVMH and Kering brands.

LVMH is a luxury conglomerate that owns brands such as Dior, Louis Vuitton and Fendi among others; Kering owns Gucci, Balenciaga and Saint Laurent. Both groups sell their products at Saks and Neiman Marcus, but are more focused on driving consumers to their own stores and e-commerce sites.

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On the other hand, smaller independent brands that have long relied on supermarkets to reach consumers across the country will have less choice and power in their negotiations with stores.

The Federal Trade Commission has been paying close attention to coordination among fashion retailers. In April, that is Moved to Vol The planned acquisition of Capri (the group that owns Michael Kors, Versace and Jimmy Choo) by Tapestry (which owns Coach, Kate Spade and Stuart Weitzman). The company argued that the planned merger would affect competition between different brands. The case is expected to go to trial in September.

When the Saks-Neiman deal came up, Mr. Burke said, “I’m sure they’ll take a closer look at it.”

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