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Saks Fifth Avenue owner buying Neiman Marcus for $2.65 billion
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Date:2025-04-14 00:10:33
Saks Fifth Avenue parent Hudson's Bay Company is acquiring Neiman Marcus for $2.65 billion, the privately-held upscale retailers said Thursday in a joint announcement.
The combined entity, to be called Saks Global, will have a combined $7 billion portfolio of retail real estate assets, HBC and Neiman said in a statement.
"We're thrilled to take this step in bringing together these iconic luxury names, Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman," HBC CEO Richard Baker said in a statement. "This is an exciting time in luxury retail, with technological advancements creating new opportunities to redefine the customer experience, and we look forward to unlocking significant value for our customers, brand partners and employees."
The Wall Street Journal first reported the deal on Wednesday.
Rare move by Amazon
Amazon is facilitating the deal by taking a minority stake in Saks Global. The acquisition is being financed with $2 billion raised by HBC, and affiliates of Apollo Global Management are offering $1.5 billion in debt.
Pairing the luxury department store chains is not unexpected, retail analyst Neil Saunders of GlobalData said, noting that Saks and Neiman executives have explored joining for forces "for some time." But Amazon's involvement "adds a bit of spice" to the combination because it would give the online retailer a foothold in the luxury space.
"The real win here would be the ability of Amazon to streamline logistics and e-commerce, giving the new entity an advantage in a market where remote shopping has become more important to shoppers — especially younger ones, which both chains need to do more to attract."
The investment in Neiman Marcus is Amazon's first in a brick-and-mortar retailer since it acquired Whole Foods in 2017, according to Bloomberg News. Amazon declined to comment on the planned merger.
Among the country's oldest retailers
Herbert Marcus Sr., his sister, Carrie Marcus Neiman, and her husband A.L. Neiman opened the retailer's first store in Dallas, Texas, in 1907. The company was sold to department store operator Broadway-Hale in 1969, setting the stage for it to expand beyond Texas. Later, Neiman Marcus came under the ownership of the conglomerate Harcourt General, which also published textbooks and owned movie theaters.
In 1999, Harcourt General spun off Neiman Marcus stores and Bergdorf Goodman. Private equity firms TPG Capital and Warburg Pincus bought the company in 2005 for $5.1 billion.
Today, the retailer has 36 Neiman Marcus stores in the U.S., two Bergdorf Goodman stores and five Last Call outlets. The company declared bankruptcy in May of 2020, at the time becoming one of the highest-profile retailers to collapse as the COVID-19 pandemic was shuttering retailers across the U.S.; it emerged from court supervision roughly four months later after shedding billions in debt.
Saks, based in New York City, was founded in 1924 and operates 39 stores in the U.S. In early 2021, the retailer spun off its website into a separate company to capitalize on a surge in online shopping spurred by the pandemic.
Hudson Bay — which also runs the Canadian department store chain Hudson's Bay is known as HBC and has a history dating back to 1670, bought Saks in 2013 for $2.9 billion, including debt.
Both Saks and Neiman have struggled to boost growth in recent years. Although the enlarged company would have greater leverage in negotiating with brands, it would still likely struggle to compete with global luxury conglomerates such as Kering and LVMH, which could end up "creating an even bigger headache for Saks," Saunders said.
Marc Metrick, CEO of Saks' e-commerce business, will become chief executive of Saks Global. He told The Associated Press on Thursday during a phone interview that consumers are increasingly demanding more access to designer product, easier ways to shop and more personalized experiences.
"This type of combination was the next move to make in order to put Saks, Neiman Marcus and Bergdorf Goodman where they need to be for the consumer, " he said.
—The Associated Press contributed to this report.
Kate GibsonKate Gibson is a reporter for CBS MoneyWatch in New York, where she covers business and consumer finance.
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