Saks Global, the parent of Saks Fifth Avenue and Neiman Marcus, has laid off hundreds of employees in New York City and Dallas as part of a multi-year plan to integrate Neiman Marcus into its business.
Saks Global expects to reduce its annual costs by $500 million in so-called synergies between the two luxury retailers over the next few years, a Saks Global spokesperson told CoStar News. New York City-based Saks Global has slashed about 14% of its U.S. workforce since acquiring Neiman Marcus in a deal with a total enterprise value of $2.7 billion that was finalized at the end of December.
The deal included funds from tech giants Amazon and Salesforce as minority investors, showing the increasing emphasis on tech for the new parent of Neiman Marcus that also operates the Bergdorf Goodman, Saks Fifth Avenue and Saks Off 5th brands.
This week, 11% of Saks Global's U.S. workforce, including both legacy Saks and Neiman Marcus employees, were impacted by the job cuts, according to people familiar with the matter.
"We are continuing the multi-year integration process following our acquisition of Neiman Marcus Group, including capturing synergies and addressing duplicate and overlapping roles," the spokesperson said. "As a part of this, we have eliminated certain roles."
WWD first reported the Saks Global layoffs that have totaled 550 employees since the Neiman Marcus deal closed. Both Saks and Neiman Marcus are expected to share an integrated buying team, or so-called commercial team, according to WWD. Other jobs impacted are duplicate roles where responsibilities overlap in areas including finance, technology, operations and human resources.
Bergdorf Goodman's business and its two stores in New York City are not expected to be impacted by the integration.
Saks Global announced it would close its Tennessee distribution center in June, in a move also expected to cut hundreds of jobs. The fulfillment operations are being shifted to another facility in Philadelphia.
Like other retailers, Saks appears to be optimizing its real estate with the recent closure of its Saks Fifth Avenue store in Palm Beach, Florida, and its decision earlier this year exit a big office lease that served as Neiman Marcus' headquarters in Dallas. Neiman Marcus was founded in downtown Dallas in 1907.
"As we look to the future, we are building an operationally and financially strong company that redefines the luxury retail experience," Saks Global said in a company statement.