Amazon And Saks Fifth Avenue Owner Buying Neiman Marcus At $2.65 Billion

Amazon And Saks Fifth Avenue Owner Buying Neiman Marcus At $2.65 Billion

Neiman Marcus, a luxury department store chain founded in 1907, has been a prominent player in the high-end retail industry. With its iconic stores and exclusive designer collections, Neiman Marcus has catered to discerning customers for over a century.

The Deal:

Hudson Bay Co., the parent company of Saks Fifth Avenue, is acquiring Neiman Marcus for a whopping $2.65 billion. Here are the key details:

Merger Details:

• • The combined entity will be called Saks Global.
  • It will have a total of 75 stores, including two Bergdorf Goodman locations, also along with 100 off-price outlets.
  • Amazon is facilitating the deal by taking a minority stake in Saks Global.

Financial Aspects:

• • The acquisition is being financed with $2 billion raised by HBC.
  • Affiliates of Apollo Global Management are also offering $1.5 billion in debt.

Significance:

• •  As Saks and Neiman executives have explored joining forces for some time.
  • Amazon’s involvement adds a bit of spice, also giving the online retailer a foothold in the luxury space.

History:

• • Neiman Marcus, founded in 1907, is one of the country’s oldest retailers.
  • It was sold to department store operator Broadway-Hale in 1969. And later came under the ownership of Harcourt General.
  • Private equity firms TPG Capital and also Warburg Pincus bought Neiman Marcus in 2005.
  • The retailer declared bankruptcy in May 2020 but emerged after shedding billions in debt.

Amazon’s Role:

• • This investment marks Amazon’s first in a brick-and-mortar retailer since acquiring Whole Foods in 2017.
    • Luxury Retail Entry: This move allows Amazon to enter the luxury retail space, also leveraging Saks Fifth Avenue’s brand reputation and customer base.
    • Logistics Optimization: By partnering with Saks Global. Amazon also aims to streamline logistics and enhance its luxury product offerings.

Saks, founded in 1924, continues to be a prominent player in the retail landscape.