Hudson’s Bay Company (HBC), the parent company of the American department store chain Saks Fifth Avenue, has announced its acquisition of Neiman Marcus Group for $2.65 billion. This move comes as the luxury department store industry faces a downturn due to the spread of e-commerce and the consequent departure of younger generations.
HBC announced on July 4 that the merger would lead to the establishment of Saks Global. Luxury department store brands in North America such as Saks Fifth Avenue, Saks OFF 5th, Neiman Marcus, and Bergdorf Goodman will be included in this merger.
HBC CEO Richard Baker expressed his excitement about the acquisition, saying, “We are very pleased to bring together these iconic luxury brands,” adding, “For years, many in the industry have anticipated the benefits this deal will bring to customers, partners, and employees.”
HBC’s acquisition of Neiman Marcus is noteworthy as it takes place amid a turbulent period for traditional offline retail, driven by the explosive growth of e-commerce. Since the COVID-19 pandemic, younger consumers have been turning away from luxury department stores and focusing more on affordable e-commerce platforms. According to estimates by consulting firm Bain & Company, luxury consumption in the U.S. decreased by 8% last year compared to the previous year.
Amazon, the largest e-commerce company in the U.S., plans to acquire a minority stake in Saks Global and provide support in technology and logistics.
