After months of negotiation, Hudson’s Bay Company’s (HBC) Saks Fifth Avenue, inked a deal to acquire longtime retail rival Neiman Marcus for $2.65 billion Wednesday. The company formed by the merger will be called Saks Global, and will likely create a powerhouse luxury retail company.
The joint company would have around $10 billion in yearly sales, the Wall Street Journal reported.
HBC, who purchased Saks in 2013, recorded sales of around $3 billion in that first year, last year the company was around $6 billion in sales. In 2013 Neiman Marcus saw $4.7 billion in sales, the outlet reported.
Exclusive: Saks is merging with Neiman Marcus in a $2.65 billion deal—with help from Amazon https://t.co/OcVusdb5B0 https://t.co/OcVusdb5B0
— The Wall Street Journal (@WSJ) July 3, 2024
Amazon, who helped push the deal forward, will have a minority share in Saks Global and contribute technology and logistical aid. Salesforce will also have a minority share and help the new company integrate artificial intelligence. Chief executive of Saks’s e-commerce business Marc Metrick is set to lead Saks Global, the outlet reported. (RELATED: Two US Airlines Terminate Merger Agreement That Could Have Created Nation’s Fifth Largest Airline)
HBC will use $2 billion from existing investments to merge the two companies. Investors include Rhone Capital, the Abu Dhabi Investment Council, HBC chairman Richard Baker’s private equity firm NRDC Equity Partners and Baker’s son Jack Baker. Apollo Global Management is also tacking on $1.15 billion for debt financing, WSJ reported.
Luxury goods sales have declined recently since a large increase in post-pandemic spending has dried up. Bain & Company said luxury purchases in the Americas fell 8% in 2023 compared to numbers from 2022, the journal reported.
