Saks Parent To Acquire Neiman Marcus For $2.7B With Amazon, Salesforce As Investors
The owner of Saks Fifth Avenue is buying one of its biggest competitors in an Amazon-backed bid to create a global luxury giant.
HBC announced on the Fourth of July that it reached a deal to buy Neiman Marcus for $2.65B in "total enterprise value." Amazon invested an undisclosed amount into the new entity, to be dubbed Saks Global, with plans to help the new company with its technology and logistical efforts, The Wall Street Journal reported.
The new combined entity will own and operate Saks Fifth Avenue, Saks OFF 5th, Neiman Marcus and Bergdorf Goodman. Saks Global will have a $7B real estate portfolio with 39 Saks Fifth Avenue stores, 95 Saks Off 5th locations, 36 Neiman stores, two Bergdorf Goodman locations and five Last Call stores.
Saks.com’s current CEO Marc Metrick will take the helm as CEO of Saks Global once the deal closes. HBC's Canadian assets, which include its namesake Hudson's Bay department stores, would be spun off into a separate entity.
Alongside Amazon, Salesforce and software investing firm Insight Partner have also agreed to be minority partners in Saks Global.
After years of considering mergers, the boards of HBC, which purchased Saks in 2013, and Neiman Marcus approved the acquisition on Thursday. The transaction is now awaiting regulatory approval. Saks Global is projected to have $10B in annual sales, according to the WSJ.
Neiman Marcus filed and emerged from bankruptcy in 2020, eliminating $4B in debt and closing a number of stores.
“For years, many in the industry have anticipated this transaction and the benefits it would drive for customers, partners and employees,” Richard Baker, HBC executive chairman and CEO, said in a press release. “This is an exciting time in luxury retail, with technological advancements creating new opportunities to redefine the customer experience.”
The portfolio will create clusters of brands for Saks Global, with 11 areas where Saks Fith Avenue, Bergdorf Goodman and Neiman Marcus are within a mile of each other, CoStar reported, including on Fifth Avenue in New York City, Wilshire Boulevard in Beverly Hills, the Magnificent Mile in Chicago, in Atlanta, Boston, St. Louis, San Francisco, Las Vegas and Houston. The portfolio also will include eight malls with both a Saks and Neiman, CoStar reported.
HBC Properties and Investments CEO Ian Putnam will become CEO of Saks Global Properties and Investments, the company announced.
The transaction is being financed by a $1.15B term loan from Apollo, while Bank of America, Citigroup, Morgan Stanley, RBC Capital Markets and Wells Fargo are underwriting a $2B revolving loan facility.
