“HBC, the parent company of Saks Fifth Avenue, has finalized an agreement to acquire Neiman Marcus Group (“NMG”), which owns Neiman Marcus and Bergdorf Goodman, for a total enterprise value of $2.65 billion. Following the transaction, HBC will establish Saks Global, a powerhouse in luxury retail combining these prestigious brands and their associated real estate assets.
“We are excited to unite these iconic luxury brands, Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman,” stated Richard Baker, HBC’s Executive Chairman and CEO. “This transaction marks a pivotal moment in luxury retail, leveraging technological advancements to enhance the customer experience and unlock substantial value for our partners and employees.”
Strategic Benefits for Customers, Brands, and Employees
Upon completion, Saks Global aims to elevate the luxury shopping experience by:
Enhancing the luxury shopping experience: Saks Global will invest in enhancing the luxury shopping journey, ensuring seamless access to a wide range of fashion offerings across all channels. By leveraging each brand’s heritage of innovation, Saks Global plans to advance online functionalities and fulfillment processes while expanding product accessibility.
Personalizing customer interactions: Recognizing the importance of personalized service in luxury retail, Saks Global will prioritize technology-driven personalization. Utilizing first-party data and AI, the company aims to deliver tailored online shopping experiences and empower sales associates to provide exceptional customer service.
Supporting established and emerging brands: With over a century of commitment to luxury fashion, Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman will continue to showcase the latest designs from established and emerging designers. Through enhanced ecommerce capabilities and strategically located stores, Saks Global aims to help brands reach their target audience effectively.
Creating value for employees: Positioned for success in the evolving luxury market, Saks Global intends to offer significant value and career growth opportunities for its employees.
Marc Metrick, current CEO of Saks.com, will assume the role of CEO of Saks Global, overseeing retail and consumer operations and driving strategies to elevate the luxury retail experience.
“Saks remains dedicated to leading the luxury fashion landscape, meeting customers at their evolving needs and preferences,” commented Mr. Metrick. “We hold great respect for NMG and its team, and together, with a focus on innovation, we are poised to drive growth for our brand partners and provide enriching career paths for the talented individuals across Saks Global.”
Geoffroy van Raemdonck, CEO of Neiman Marcus Group, expressed confidence in the transaction, stating, “This decision underscores our team’s commitment to fostering meaningful customer relationships through our unique business model. We view this as a proactive step in a dynamic retail environment that will unlock value for our customers and brand partners. Saks Fifth Avenue shares our passion for connecting customers with the finest luxury fashion, and with our combined strengths and a strengthened capital structure, our iconic Neiman Marcus and Bergdorf Goodman brands are positioned for sustained success.”
Structure of Saks Global
Post-transaction, Saks Global will encompass the Saks Fifth Avenue, Saks OFF 5TH, Neiman Marcus, and Bergdorf Goodman brands, each operating under their existing names. Additionally, Saks Global will manage HBC’s U.S. real estate assets and Neiman Marcus Group’s real estate holdings, creating a $7 billion portfolio of prime retail real estate in top luxury destinations.
Ian Putnam, currently President and CEO of HBC Properties and Investments, will assume the role of CEO of Saks Global Properties and Investments, responsible for optimizing and maximizing the value of the extensive real estate portfolio. Both Mr. Metrick and Mr. Putnam will report to Mr. Baker, who will serve as Executive Chairman of Saks Global.
HBC’s Canadian Operations
Following the transaction’s closure, HBC’s Canadian business will be restructured as a separate entity with reduced debt and enhanced liquidity. HBC will retain full ownership of its Canadian retail and real estate assets, including Hudson’s Bay, which operates TheBay.com and a network of Hudson’s Bay stores, alongside a CAD$2 billion real estate portfolio. This strategic move positions HBC’s Canadian business for future growth while continuing to serve its loyal Canadian customer base.
Transaction Details
The acquisition has received approval from the Boards of Directors of HBC and Neiman Marcus Group, subject to customary closing conditions and regulatory approvals. Both companies will operate independently until the transaction is finalized.
Funding for the $2.65 billion acquisition will involve a combination of equity capital from new and existing shareholders, as well as debt facilities. Following the transaction’s closure, Amazon will collaborate with Saks Global to drive innovation for customers and brand partners. Rhône Capital will continue as the lead investor in Saks Global, and Insight Partners, a global software investor, will become a shareholder in the newly formed entity. Salesforce is also set to invest upon transaction completion.
HBC secured a fully committed $1.15 billion term loan from investment funds managed by Apollo affiliates, along with a $2 billion fully committed revolving asset-based loan from Bank of America (lead underwriter), Citigroup, Morgan Stanley, RBC Capital Markets, and Wells Fargo. These financial arrangements will deleverage the combined enterprise and provide substantial liquidity to Saks Global.
Advisors
M. Klein & Company is serving as the lead financial and capital markets advisor to HBC for the acquisition and related financing activities. Solomon Partners is also advising HBC on financial matters. Elm Street Advisors is providing strategic, commercial, and operational guidance. Deloitte is offering financial and tax advisory services to HBC.
NMG is receiving financial advice from J.P. Morgan and Lazard, with legal counsel provided by Sullivan & Cromwell, LLP.
Berenson & Company acted as the financial advisor to Insight Partners.
The transaction is expected to close following regulatory approvals and other customary closing conditions, setting the stage for a transformative union in the luxury retail sector.”
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