Saks Global finalized its acquisition of Neiman Marcus on Monday, bringing the luxury department store chain into its fold through a $2.7 billion deal backed by e-commerce giant Amazon and other large companies.
The deal was announced Monday. (Photo by Scott Olson/Getty Images)
Saks Global announced the deal Monday, noting its brands will now include Neiman Marcus, Bergdorf Goodman, Saks Fifth Avenue, and off-price retailer Saks OFF 5TH.
The agreement, which was first reported this summer, will provide Saks with 36 Neiman Marcus stores located in states such as California, Texas, Florida, Illinois and New York.
The acquisition was financed through equity contributions from companies like Amazon, Salesforce and Authentic Brands Group (Reebok, Forever 21, Billabong).
Bloomberg reported the deal was made to boost profitability and cut down on costs through improved bargaining power with vendors and the reduction of supply chain costs.
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Amazon will work with Saks “to innovate on behalf of customers and brand partners,” according to the deal’s announcement, which means the e-commerce company will gain access to further luxury items that already include “pre-loved” products from Louis Vuitton, Prada, Gucci and Chanel.
Hudson's Bay Company, the majority owner of Saks, will gain control of Neiman Marcus just four years after filing for bankruptcy fueled by COVID-19-linked losses and store closures. The deal also comes amid a slide in luxury retail spending, with some 50 million consumers leaving the luxury goods market, according to Vogue Business, which cited management consultancy Bain and Italian luxury association Altagamma. Federica Levato, a partner at Bain, told Vogue increased costs of living and luxury brands pricing more consumers out is part of the reason for the downturn in luxury spending.
The Saks-Neiman Marcus mega-deal and Amazon’s underground path to luxury (Vogue Business)