NEW YORK, NY – Saks Fifth Avenue and Neiman Marcus are set to merge, forming a luxury department store powerhouse, with Amazon stepping in as a key partner.
Saks’ parent company, HBC, announced Thursday that it will acquire Neiman Marcus for $2.65 billion, creating a new entity called Saks Global. This merger will combine the two renowned department stores, Saks Off 5th discount outlets, and the upscale Bergdorf Goodman. “We’re excited to unite these iconic luxury brands,” said HBC CEO Richard Baker in a statement.
The merger, long anticipated by industry insiders, aims to provide the combined entity with greater bargaining power to negotiate more favorable terms with luxury brands. Saks operates 39 stores, while Neiman Marcus, which emerged from bankruptcy in 2020, has 36 stores. Neiman Marcus also owns Bergdorf Goodman, adding another layer of prestige to the new conglomerate.
Leadership changes accompany the merger. Marc Metrick, current CEO of Saks.com, will take over as CEO of Saks Global. Ian Putnam, CEO of HBC Properties and Investments, will lead Saks Global’s property and investments division. Both will report to Baker, who will become the executive chairman of Saks Global.
HBC’s Canadian operations, including Hudson’s Bay department stores and $2 billion in property assets, will remain separate from Saks Global. This division is expected to continue serving its Canadian customer base while supporting future growth.
The merger is a strategic response to shifts in the retail industry, notably the decline of traditional department stores and the rise of luxury brands’ direct-to-consumer sales models. The consolidation seeks to reclaim some control from luxury conglomerates like LVMH, which have been expanding their direct sales channels.
However, the deal could face regulatory hurdles. The Federal Trade Commission recently opposed Tapestry’s acquisition of Capri, citing concerns over reduced competition. This precedent suggests that the Saks-Neiman Marcus merger might also attract scrutiny.
Amazon’s involvement adds another dimension to the merger. The tech giant aims to innovate alongside Saks Global, enhancing customer and brand partner experiences. Amazon has previously ventured into physical retail with Amazon Style stores, though these were short-lived. Analyst Neil Saunders noted that Amazon’s stake aligns with its ambitions in the luxury market, potentially streamlining logistics and e-commerce for the new entity.