RiverNorthPhotography
HBC confirmed on Friday that will it acquire Neiman Marcus Group for $2.65 billion. The combination of Neiman Marcus with the company that already owns Saks Fith Avenue is expected to fuel growth and benefit customers, brands, and employees by meeting the increasing demands of the rapidly evolving luxury retail industry.
After the transaction closes, HBC will establish Saks Global, a combination of world-class luxury retail and real estate assets, including Saks Fifth Avenue, Saks OFF 5TH, Neiman Marcus, and Bergdorf Goodman, each of which will continue operations under their respective brands.
Saks Global was highlighted as being well positioned to meet customers’ increasing demands for a highly personalized, seamless experience with greater opportunities for product discovery across all channels.
“We’re thrilled to take this step in bringing together these iconic luxury names, Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman,” said Richard Baker, HBC Executive Chairman and CEO.
The purchase price is expected to be funded by a combination of equity capital from new and existing shareholders and debt facilities. Notably, Amazon (AMZN) will be an investor in and work with Saks Global to innovate on behalf of customers and brand partners following the close of the transaction.
Upon closing of the transaction, Saks Global will comprise the Saks Fifth Avenue, Saks OFF 5TH, Neiman Marcus and Bergdorf Goodman brands, which will continue operations under their respective brand names. Saks Global will also include HBC’s U.S. real estate assets and Neiman Marcus Group’s real estate assets, creating a $7 billion portfolio of well-located retail real estate assets in top-tier luxury shopping destinations. Ian Putnam, currently President and CEO of HBC Properties and Investments, will become CEO of Saks Global Properties and Investments, which will manage, maximize and enhance the company’s robust portfolio of assets. Both Metrick and Putnam will report to Baker, who will serve as Executive Chairman of Saks Global.
The department store merger is of interest to Macy’s (NYSE:M), Nordstrom (NYSE:JWN), Dillard’s (DDS), and Kohl’s (KSS).