Saks Fifth Avenue’s parent company has agreed to buy rival Neiman Marcus for $2.65 billion, with Amazon taking a minority stake in the combined company. The deal would unite the two luxury retailers, which have struggled to operate as standalone brand owners due to inflation and high interest rates. 

Salesforce Inc. would be another minority shareholder in the new company, which will be called Saks Global, and assist with the adoption of artificial intelligence. Amazon would provide technology and logistical expertise. 

Saks already does business with both Amazon and Salesforce, so the transaction would deepen their partnerships. The boards of Saks parent Hudson’s Bay Co. and Neiman Marcus have approved the transaction, and an announcement could come. Marc Metrick, chief executive of Saks’s e-commerce business, will run the combined company..

Neiman Marcus went bankrupt in 2020 in one of the high-profile collapses among retailers forced to temporarily close stores in response to the COVID-19 pandemic. HBC is financing the deal with $2 billion raised from existing investors, including Rhone Capital, the Abu Dhabi Investment Council, and NRDC Equity Partners. Apollo Global Management APO is providing $1.15 billion in debt financing.

HBC plans to operate Canadian retail operations separately from Saks Global as a wholly owned division, holding the company’s $2-billion Canadian real estate assets. The deal will also recapitalize the Canadian business to reduce leverage and enhance liquidity.

The boards of directors of both HBC and Neiman Marcus Group have approved the transaction, according to announcements. The deal is subject to regulatory approvals and other closing conditions.

Source: The Star
Source: Globe and Mail
Source: Financial Post
Source: The Star
Source: The Star
Source: Globe and Mail