In a major shakeup of the luxury retail industry, Saks Fifth Avenue and Neiman Marcus have agreed to merge in a $2.65 billion deal. The two iconic brands will join forces to create a formidable force in high-end retail, with Amazon set to become a minority investor and provider of technology and logistics services.
According to reports, Saks owner HBC has reached an agreement with Neiman Marcus' current owners, including Ares Management and Canada Pension Plan Investment Board. The deal comes after Neiman Marcus emerged from bankruptcy in 2020, shedding jobs and restructuring its operations.
Amazon's involvement marks a significant shift for the e-commerce giant as it continues to expand its presence in the retail sector. Jeff Bezos' company will provide valuable technology and logistics services to the merged entity, which will be named Saks Global.
Business software giant Salesforce is also set to become an investor in Saks Global, further bolstering the new company's capabilities. The deal is expected to receive regulatory approval within nine months and will create a retail powerhouse with over $10 billion in annual sales.
The merger comes as luxury retailers continue to grapple with inflation, pent-up demand from the COVID-19 pandemic, and increased competition from e-commerce giants like Amazon. The new entity is expected to offer a more comprehensive shopping experience for customers, combining Saks Fifth Avenue's iconic flagship stores with Neiman Marcus' extensive off-price portfolio.
Despite the merger, both brands will maintain their distinct identities and continue to operate independently. Marc Metrick, the current CEO of Saks and Saks.com, is expected to lead the new company.
The deal marks a significant moment for both companies as they look to adapt to changing consumer preferences and compete with larger retailers like Macy's, Nordstrom, and Bloomingdale's. It also comes as luxury brands continue to grapple with the impact of e-commerce on their businesses and the increasing dominance of tech giants like Amazon.
Sources: The New York Post, The New York Times, Fox Business
