Amazon (AMZN) is helping the parent of Saks Fifth Avenue, Hudson Bay Co., buy Neiman Marcus in a $2.65 billion deal. People familiar with the matter told multiple outlets that the boards of both companies had approved the deal and that Amazon was also taking a stake in it.
The New York Times and other outlets reported the news on Wednesday. The paper said that the combined entity will be called Saks Global. It will have 75 stores, two of which are Bergdorf Goodman locations, and 100 off-price stores.
Hudson Bay Co.’s chief executive and chairman Richard Baker told The Times, “Part of what excited us about acquiring Neiman Marcus was their world-class sales force.”
The chairman added, “People have forgotten how important people are. When selling luxury products, you need beautiful stores and salespeople customers trust.”
The newspaper also said that Amazon is helping the deal go through by taking a minority stake in Saks Global. HBC is raising $2 billion, while Apollo Global Management and affiliates provide $1.5 billion as debt.
Amazon has been looking to establish itself in the luxury market for some time. This investment by the e-commerce giant in brick-and-mortar stores comes more than six years after it invested in Whole Foods.
Neiman Marcus and Saks are legacy stores in the US, having completed more than a century. Neiman Marcus opened its first store in Dallas, Texas, in 1907, while Saks opened its first in New York City in 1924. Hudson Bay Co., also known as HBC, has a history dating back to 1670.
Neiman Marcus became one of the most prominent retailers to collapse in May 2020 as the pandemic shuttered businesses. Four months later, it shed billions in debt and emerged from court supervision. Saks has also faced some turmoil with the general churn in retail.
CWEB analyzes that Saks Global could be expected to become a significant global player but will continue to face competition from Paris-based conglomerate LVMH, which has very popular clothing and jewelry brands, as well as other established luxury goods makers in a market that is seeing decreasing sales.
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