Saks owner to buy Neiman Marcus—with help from Amazon

The parent of Saks Fifth Avenue sealed a $2.65 billion deal to buy rival Neiman Marcus, according to people familiar with the matter, creating a powerhouse in luxury retailing that seeks to hang onto wealthy shoppers — all with a little help from Amazon.com.

The boards of both companies have approved the transaction and an announcement could come as soon as this evening, the people said.

A Saks Fifth Avenue corporate logo hangs in the front window of a store on Wilshire Boulevard in Los Angeles on April 14, 2023. Saks parent HBC has signed a deal to purchase Neiman Marcus, according to people familiar. (Gary Hershorn/Getty Images / Getty Images)

The department-store chains had been negotiating for months and had explored a combination several times over the years. Both have struggled as some consumers spent less on pricey goods and fashion brands opened their own flagship stores. 

The combined company would have about $10 billion in annual sales, the people said. Luxury behemoth LVMH Moët Hennessy Louis Vuitton, which owns Dior, Louis Vuitton and dozens of other brands, had sales of about $94 billion last year.

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Amazon would take a minority stake in the new company, which will be called Saks Global, and plans to provide it with technology and logistical expertise, the people said. Salesforce is another minority shareholder and would assist with the adoption of artificial intelligence. Saks already does business with both tech companies, so the transaction would deepen existing partnerships, one of the people said. 

HBC, a holding company that bought Saks in 2013, is financing the deal with $2 billion it raised from existing investors, the people said. They include Rhône Capital, the Abu Dhabi Investment Council and NRDC Equity Partners, a private-equity firm run by Richard Baker, HBC’s executive chairman, and his son Jack Baker. Affiliates of Apollo Global Management are providing $1.15 billion in debt financing.

Marc Metrick, the chief executive of Saks’s e-commerce business, will run the combined companies, the people said. 

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The deal is a bet that the companies will be stronger together than they have been apart. Neiman, which had been owned by various private-equity firms for years, filed for bankruptcy protection in 2020. It emerged later that year with less debt and new owners, including Pacific Investment Management Co., Davidson Kempner Capital Management and Sixth Street Partners.

Neiman Marcus is being purchased by Saks owner HBC in a $2.65 billion deal, sources say. (Noam Galai/Getty Images / Getty Images)

The year HBC bought Saks, the retailer had sales of about $3 billion. Last year, sales were roughly $6 billion, the people said. Neiman Marcus had $4.7 billion in…