Saks Fifth Avenue’s Parent Company to Acquire Neiman Marcus for $2.65 Billion

The parent company of Saks Fifth Avenue has agreed to purchase Neiman Marcus Group, which includes Neiman Marcus and Bergdorf Goodman stores, for $2.65 billion. Amazon will hold a minority stake in the new entity, named Saks Global.

This acquisition merges two luxury retail giants, aiming to strengthen their position in a market that has seen significant changes. The new entity, Saks Global, will encompass the brands Saks Fifth Avenue, Saks OFF 5TH, Neiman Marcus, and Bergdorf Goodman. It will also include the real estate assets of Neiman Marcus Group and Hudson’s Bay Company (HBC), which bought Saks Fifth Avenue in 2013.

Despite the merger, the stores will continue to operate under their established brand names. The acquisition was facilitated by $1.15 billion in financing from investment funds managed by Apollo affiliates and a $2 billion revolving asset-based loan from a consortium of banks, led by Bank of America.

Negotiations between the two companies had been ongoing for about a year. Amazon’s involvement as a minority stakeholder introduces a unique dynamic to the deal. According to Neil Saunders, managing director of GlobalData, Amazon’s participation adds a new dimension to the merger. Amazon will contribute its logistics and personalization technology expertise to Saks Global. Additionally, Salesforce will join as an investor upon the deal’s completion.

The consolidation aims to create a formidable entity in the luxury retail sector, addressing the fragmentation caused by various players, including online marketplaces and individual upscale fashion brands opening their stores.