The parent company of luxury department store Saks Fifth Avenue has finalized a $2.7 billion acquisition of competitor Neiman Marcus Group, combining the pair of retail giants into a singular shopping colossus.
The deal closed as the U.S. department store sector has been hit especially hard in recent years, with malls seeing dips in traffic and the sector facing increasing competition from e-commerce, discounters and off-price retailers.
Saks Global's parent, Hudson's Bay Co., is based in Toronto and New York. Saks Global said it will oversee an umbrella of stores that will serve customers under their respective brand names, including Neiman Marcus, Bergdorf Goodman, Saks Fifth Avenue and Saks Off 5th, as well as a real estate portfolio valued at $7 billion.
The transaction was financed in part through a combination of equity contributions from new investors, including tech giants Amazon and Salesforce.
“With data and innovation at our core and a portfolio of prime real estate, we aim to redefine the luxury shopping experience,” Richard Baker, executive chairman of Saks Global, said in a statement.
CoStar News reported this summer on the deal’s progress, including the establishment of Saks Global.
The transaction stands to affect dozens of brick-and-mortar locations across brands, though details have yet to be released. Saks Global declined to comment to CoStar News, and Neiman Marcus Group did not immediately return an emailed request for comment.
Marc Metrick will serve as CEO of Saks Global Operating Group, and Ian Putnam will serve as CEO of Saks Global Properties & Investments. Both are set to report to Richard Baker, Saks Global’s executive chairman.
The Saks Global-Neiman Marcus announcement came the same day Nordstrom's founding family said it struck a $6.25 billion deal to take the troubled department store chain private, partnering with a Mexican retailer to acquire the company.
In other signs of department stores struggling, Sears and J.C. Penney filed for Chapter 11 protection, Lord & Taylor was liquidated and Macy's has been maneuvering to bolster its lagging sales, closing underperforming stores as part of that process.