HBC, parent company of Saks Fifth Avenue and Hudson’s Bay stores, is getting some help from Amazon in its definitive agreement to acquire Neiman Marcus Group, parent of Neiman Marcus and Bergdorf Goodman, for a total enterprise value of $2.65 billion.
Saks Global will be well positioned to meet luxury consumer evolving expectations, HBC maintained, advancing the luxury shopping experience by investing to ensure that customers can seamlessly access a broad fashion assortment through their channel of choice. The new organization will will drive further advancements in online functionality and fulfillment processes while providing greater merchandise access. Plans call for Saks Global to advance high-touch, personalized services leveraging first-party data and AI to create individualized online shopping experiences as well as to empower salespeople in their customer service capacities.
Current Saks.com CEO Marc Metrick will become CEO of Saks Global, leading its retail and consumer businesses and driving the strategy to advance the luxury shopping experience, HBC indicated.
Upon closing of the transaction, Saks Global will comprise the Saks Fifth Avenue, Saks OFF 5TH, Neiman Marcus and Bergdorf Goodman brands. Saks Global will also incorporate HBC’s U.S. and Neiman Marcus Group’s real estate assets, creating a $7 billion group of 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. Metrick and Putnam will report to Richard Baker, HBC executive chairman and CEO, who will serve as executive chairman of Saks Global. HBC added that it will recapitalize the company’s Canadian business as a standalone entity, separate from Saks Global, with significantly reduced leverage and enhanced liquidity.
HBC will continue to wholly own its Canadian retail and real estate assets, including Hudson’s Bay, which operates TheBay.com and the Hudson’s Bay network of stores, as well as a C$2 billion real estate portfolio. HBC will fund the transaction through a combination of equity capital from new and existing shareholders and debt facilities, as well as the Amazon investment. Equity firm Rhône Capital will continue as the active lead investor in Saks Global. Software investor, Insight Partners, which already has a stake in Saks.com, will be a shareholder in the new company as will software provider Salesforce.
“We’re thrilled to take this step in bringing together these iconic luxury names, Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman,” Baker said. “For years, many in the industry have anticipated this transaction and the benefits it would drive for customers, partners and employees. This is an exciting time in luxury retail, with technological advancements creating new opportunities to redefine the customer experience, and we look forward to unlocking significant value for our customers, brand partners and employees.”
