HBC, the parent company of Saks Fifth Avenue, has announced its acquisition of Neiman Marcus Group (NMG), a Dallas-based luxury retailer, in a deal worth $2.65 billion. This move will result in the creation of a new luxury retail company called Saks Global, which will combine HBC’s Saks Fifth Avenue and Saks OFF 5th with NMG’s Neiman Marcus and Bergdorf Goodman.
The decision to merge these esteemed brands comes as no surprise to industry insiders who have long anticipated such a move. HBC CEO Richard Baker expressed his excitement about the transaction, stating that it is an exciting time in luxury retail, with technological advancements providing opportunities to redefine the customer experience.
Under the new arrangement, each label will continue to operate under its existing brand, ensuring that their unique identities and loyal customer bases are maintained. Saks Global will boast a remarkable $7 billion portfolio, consisting of real estate assets from both HBC and NMG.
To facilitate the acquisition, HBC has secured a $1.15 billion loan from investment funds managed by affiliates of Apollo Global Management, as well as a $2 billion revolving asset-based loan facility from various banks. Additionally, Amazon will be an investor in Saks Global and will collaborate with the new entity following the completion of the transaction.
Saks Global will have a strong leadership team in place to guide its future endeavors. Marc Metrick, CEO of Saks.com, will assume the role of CEO for Saks Global, while Ian Putnam, president and CEO of HBC Properties and Investments, will oversee the property and investment business. Both executives will report to Richard Baker, who will serve as executive chairman of Saks Global.
Geoffroy van Raemdonck, CEO of NMG, expressed his enthusiasm about the acquisition deal with HBC, hailing it as a proactive choice that will create value for NMG’s customers and brand partners. He believes that the combined group will position Neiman Marcus and Bergdorf Goodman for continued success in the ever-evolving retail landscape.
It is worth noting that Neiman Marcus faced significant challenges during the first months of the coronavirus pandemic, leading to its filing for bankruptcy protection in May 2020. However, the company emerged from bankruptcy in September of the same year. Like many other retailers, Neiman Marcus was forced to temporarily close its stores for several months, but it has persevered through these challenging times.
In conclusion, the acquisition of Neiman Marcus Group by HBC marks a significant development in the luxury retail industry. The creation of Saks Global will bring together esteemed brands, allowing them to leverage their complementary capabilities and navigate the evolving retail landscape. With a strong leadership team in place and support from investors like Amazon, this new venture is well-positioned for success.
