Hudson’s Bay Company, owner of Saks Fifth Avenue, has announced its acquisition of Neiman Marcus for $2.65 billion, a strategic move merging two prominent upscale retailers, as reported on Thursday.
The combined entity, set to be named Saks Global, will operate a total of 75 stores, including prestigious Bergdorf Goodman locations, along with 100 off-price outlets, according to sources cited by the New York Times.
Richard Baker, CEO and chairman of HBC, highlighted the appeal of acquiring Neiman Marcus’ renowned sales force, emphasizing the crucial role of knowledgeable personnel in selling luxury goods. The acquisition is being facilitated with $2 billion in financing raised by HBC, complemented by $1.5 billion in debt from affiliates of Apollo Global Management.
Retail analyst Neil Saunders of GlobalData noted that the union of Saks and Neiman Marcus had been anticipated, underscoring the potential synergy between the two brands. Amazon’s involvement in the deal adds a strategic dimension, potentially enhancing logistics and e-commerce capabilities for the new entity in an increasingly digital retail landscape.
Neiman Marcus, established in 1907 in Dallas, Texas, by Herbert Marcus Sr., Carrie Marcus Neiman, and A.L. Neiman, has grown into a revered luxury retailer with 36 stores nationwide, in addition to Bergdorf Goodman and Last Call outlets. The company underwent bankruptcy proceedings in 2020 amidst challenges posed by the COVID-19 pandemic, emerging later that year after restructuring its debt.
Saks Fifth Avenue, founded in 1924 and headquartered in New York City, operates 41 stores. HBC, with roots tracing back to 1670 and known for its Canadian operations under Hudson’s Bay, acquired Saks in 2013 and also owns Lord & Taylor.
While the merger promises enhanced market leverage and operational efficiencies, analysts caution that competing with global luxury giants like Kering and LVMH remains a formidable challenge for the enlarged entity.
The acquisition marks a significant step for both Hudson’s Bay Company and the luxury retail sector, reshaping the landscape of high-end shopping in North America.
