Saks Fifth Avenue's parent company to buy rival Neiman Marcus
The Saks Fifth Avenue store is located in San Franciscos upscale Union Square shopping district. (Photo by Robert Alexander/Getty Images)
Saks Fifth Avenue’s parent company is buying rival Neiman Marcus for $2.65 billion, with Amazon adding a "bit of spice" to a deal that’s been rumored for months.
The new entity would be called Saks Global, which will include Saks Fifth Avenue and Saks OFF 5TH brands, Neiman Marcus and Bergdorf Goodman, as well as the real estate assets of Neiman Marcus Group and HBC, a holding company that purchased Saks in 2013. Online retail giant Amazon would hold a minority stake.
Both Saks and Neiman Marcus have seen declining sales as shoppers shift their spending from luxury goods to experiences like travel and upscale restaurants. The deal likely will help to reduce operating costs and create more buying power with vendors.
Facade of the Neiman Marcus department store on a sunny day in downtown Walnut Creek, California, November 17, 2017. (Photo by Smith Collection/Gado/Getty Images)
"For years, many in the industry have anticipated this transaction and the benefits it would drive for customers, partners and employees," said Richard Baker, HBC executive chairman and CEO 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."
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The deal comes as no surprise to industry observers; it’s been rumored to have been in the works for months. But the twist is Amazon’s minority stake. Salesforce, a cloud-based software company, will also become an investor at closing.
Neil Saunders, managing director of GlobalData, said Amazon's stake in the deal makes sense, as it has ambitions to play more heavily in the luxury arena.
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Saunders said Amazon could use its ability to streamline logistics and e-commerce. It could also create an advantage for attracting online shoppers — especially younger ones, which both chains need to do more of, he said.
The Wall Street Journal first reported the deal.
Neiman Marcus filed for bankruptcy protection in May 2020 during the first months of the coronavirus pandemic but emerged in September of that year. Like many of its peers, the privately held department store chain was forced to temporarily close its stores for several months.
Saks Fifth Avenue currently operates 39 stores in the U.S., including its Manhattan flagship.
The Associated Press contributed to this report.