July 4 (UPI) — The parent company of Saks Fifth Avenue announced Thursday its plan to buy Neiman Marcus Group in a multi-billion-dollar deal that will establish the new Saks Global from two luxury-brand retailers that started in the early 1900s.
HBC, Saks Fifth Avenue’s parent company, said Thursday it will acquire Neiman Marcus Group for $2.65 billion.
“We’re thrilled to take this step in bringing together these iconic luxury names,” HBC CEO Richard Baker said in a statement.
With headquarters in Toronto, Canada’s Ontario province and New York, HBC is North America’s longest continually operating company, according to HBC.
The deal will now establish the so-called Saks Global, a new global entity that will encompass Saks Fifth Avenue, Saks OFF 5TH, Neiman Marcus and Bergdorf Goodman. All in, it will create a real estate portfolio valued at about $7 billion, according to the company.
There are 35 Saks Fifth Avenue stores and 95 Saks Off 5th discount stores. Neiman has 36 stores, two Bergdorf Goodman stores and five Last Call discount stores.
Horace Saks and Bernard Gimbel operated independent retail stores on New York’s 34th Street at Herald Square in 1924.
Herbert Marcus, Sr., his sister, Carrie Marcus Neiman, and her husband A.L. Neiman, constructed the first Neiman Marcus store in Dallas in 1907.
Amazon, an investor in the deal, will work with the company after the transaction is closed, according to Saks Global, “to innovate on behalf of customers and brands partners.”
Baker stated how this buy and consolidation had been anticipated by industry insiders “for years,” he said, noting the supposed “benefits it would drive for customers, partners and employees.”
HBC, which also owns Canada-based Hudson’s Bay, had secured a $1.15 billion “fully committed term loan financing” from investments by affiliates of Apollo, and a $2 billion “fully committed revolving asset-based” loan from Bank of America, Citigroup, Morgan Stanley, RBC Capital Markets and Wells Fargo.
As part of the new restructuring, Saks.com’s current CEO Marc Metrick will take the CEO job of Saks Global.
Metrick, the company says, will focus on Saks Global’s retail and consumer businesses and “driving the strategy to advance the luxury shopping experience.”
“With our ongoing focus on innovation,” he said, Saks Global is “primed to drive growth for our brand partners and create career development opportunities for the incredible talent across Saks Global.”
Ian Putnam, HBC Properties and Investments’ president and CEO, is set to be Saks Global’s CEO of property and investment businesses.
Metrick and Putnam will report to Baker, who is taking on Saks Global’s executive chairmanship.
Lord & Taylor, which HBC owned until 2019, filed for bankruptcy in 2020 and closed retail locations the next year. It now operates online.