Neiman Marcus is set to be acquired by its competitor, Saks Fifth Avenue.
The Wall Street Journal (WSJ) cited sources and reported on the 3rd that Saks’s parent company, HBC, has agreed to acquire Neiman for $2.65 billion. HBC had previously acquired Saks for $2 billion in 2013.
Amazon and Salesforce participated in the merger and acquisition (M&A), with HBC acquiring Neiman and integrating it with Saks. These two tech companies will hold a portion of the merged company’s stake.
According to sources, both the Neiman and Saks boards approved the merger.
The two companies have attempted to merge several times over the past few years, with recent negotiations spanning several months.
Both Neiman and Saks have struggled as luxury consumer spending has declined.
The merger is expected to result in an annual revenue of approximately $10 billion, which is about one-ninth of the $94 billion in sales by the world’s largest luxury conglomerate, France’s LVMH, last year.
The merged company will be renamed Saks Global.
With Amazon’s involvement, Saks Global is expected to transform into a luxury department store integrated with advanced technology and logistics. Software wholesaler Salesforce also participated in the merger and will hold a minority stake, further strengthening the alliance.
Neiman and Saks aim to bolster their operations through this merger. Neiman has been controlled by private equity funds several times and even filed for bankruptcy protection in 2020.
After reducing its debt in late 2020, Neiman was taken over by PIMCO, Davidson Kempner Capital Management, and Sixth Street Partners, among the world’s largest bond managers.
Neiman recorded sales of $4.7 billion in 2013, but its sales decreased compared to 11 years ago after closing some stores. Saks recorded sales that doubled from approximately $3 billion in 2020 to $6 billion last year.
