Saks owner to buy Neiman Marcus, source says
Changes sourcing and adds analyst comments
By Ananya Mariam Rajesh and Greg Roumeliotis
July 3 (Reuters) -The parent of Saks Fifth Avenue agreed to buy rival Neiman Marcus, a person familiar with the matter told Reuters on Wednesday, a move that is expected to give the struggling luxury retailers more power to negotiate with vendors.
Amazon and Salesforce will take minority stakes in the combined company, to be called Saks Global, and offer their technological expertise, said the Wall Street Journal, which reported the $2.65 billion deal earlier in the day.
The deal comes at a time when luxury retailers are grappling with slowing demand, a far cry from the boom seen after pandemic-related restrictions eased in 2022, as U.S. customers have become more cautious about high-end purchases.
The boards of Saks parent HBC and Neiman Marcus have approved the transaction, and an announcement could come as soon as this evening, the WSJ report said, adding that Marc Metrick, CEO of Saks's e-commerce business, will run the combined company.
Although the merger gives the combined high-end retail entity stronger negotiating power with small luxury brands, the chain would not match the heft and power of the global luxury conglomerates, which will still hold most of the cards, said Neil Saunders, managing director at retail consultancy GlobalData.
"There is a risk that the deal might end up creating an even bigger headache for Saks," Saunders added.
The most coveted high-end brands such as LVMH LVMH.PA have their own robust store networks.
Saks Global will have Salesforce assist it with the adoption of artificial intelligence, and Amazon provide its technology and logistical expertise, deepening their existing partnership with Saks, the WSJ report said.
Amazon and HBC declined to comment, while Saks Fifth Avenue, Salesforce and Neiman Marcus did not immediately respond to Reuters requests for comments.
Neiman Marcus has been in the red since it emerged from bankruptcy in 2020. It was one of the high-profile collapses among retailers forced to temporarily close stores in response to the COVID-19 pandemic.
AMAZON'S FORAY INTO THE LUXURY WORLD
A minority stake in the combined company sets up Amazon to gain a foothold in the luxury market that has seen a steady demand from a higher-income consumer base.
"Amazon taking a stake in the business would make sense, as it has ambitions to play more heavily in the luxury space and this would give it a toehold," Saunders said.
The Wall Street Journal said there were no plans to close stores after the deal is completed. There are 39 Saks Fifth Avenue stores and 95 Saks Off 5th discount stores. Saks.com operates as a separate business that is owned by HBC.
Neiman has 36 department stores, two Bergdorf Goodman stores and five Last Call discount stores. There are eight malls that have both a Saks Fifth Avenue and Neiman Marcus store, according to Green Street, a real-estate research firm.
"Amazon has also been interested in luxury trying to get more luxury on Amazon's website ... always looking for opportunities to get involved in different types of retail ... even more physical based retail like we have here with Saks and Neiman Marcus," Morningstar analyst David Swartz said.
HBC is financing the deal with $2 billion it raised from existing investors, the report said.
Existing investors include Rhone Capital, the Abu Dhabi Investment Council and NRDC Equity Partners, a private-equity firm run by Richard Baker, HBC's executive chairman, and his son Jack Baker. Apollo Global Management APO is providing $1.15 billion in debt financing.
Richard Baker and his son Jack Baker were not immediately available for comment.
Reporting by Ananya Mariam Rajesh in Bengaluru and Greg Roumeliotis in New York, additional reporting by Abigail Summerville and Siddharth Cavale in New York; Editing by Shinjini Ganguli
Gerelateerde activa
Laatste nieuws
Disclaimer: De entiteiten van de XM Group bieden diensten en toegang tot ons online handelsplatform op basis van uitsluitend-uitvoering, waardoor een persoon de beschikbare content op of via de website kan bekijken en/of gebruiken, zonder dat dit is bedoeld voor wijziging of uitbreiding. Dergelijk(e) toegang en gebruik vallen onder: (i) de algemene voorwaarden; (ii) risicowaarschuwingen; en de (iii) volledige disclaimer. Dergelijke content wordt daarom alleen aangeboden als algemene informatie. Wees u er daarnaast vooral van bewust dat de inhoud op ons online handelsplatform geen verzoek of aanbieding omvat om transacties op de financiële markten uit te voeren. Het beleggen op welke financiële markt dan ook vormt een aanzienlijk risico voor uw vermogen.
Alle materialen die op ons online handelsplatform worden gepubliceerd zijn bedoeld voor educatieve/informatieve doeleinden en omvatten geen – en moeten niet worden beschouwd als het bevatten van – financieel, vermogensbelastings- of handelsadvies en aanbevelingen, of een overzicht van onze handelsprijzen, of een aanbod of aanvraag van een transactie in financiële instrumenten of ongevraagde financiële promoties voor u.
Alle content van derden, alsmede content die is voorbereid door XM, zoals opinies, nieuws, onderzoeken, analyses, prijzen en andere informatie of koppelingen naar externe websites op deze website worden aangeboden op een 'zoals-ze-zijn'-basis, als algemene marktcommentaren, en vormen geen beleggingsadvies. Voor zover dat content wordt beschouwd als beleggingsonderzoek, moet u zich ervan bewust zijn en accepteren dat de content niet bedoeld was en niet is voorbereid in overeenstemming met de wettelijke vereisten die zijn opgesteld om de onafhankelijkheid van beleggingsonderzoek te bevorderen en als zodanig onder de geldende wetgeving en richtlijnen moet worden beschouwd als marketingcommunicatie. Zorg ervoor dat u onze Mededeling over niet-onafhankelijk beleggingsonderzoek en risicowaarschuwing in verband met de voorgaande informatie doorneemt en begrijpt; die kunt u hier lezen.
