Dallas-based luxury retailer Neiman Marcus is being purchased by the owner of rival Saks Fifth Avenue in a $2.65 billion deal, according to a report from the Wall Street Journal.
The deal would also bring in Amazon and Salesforce Inc. to become minority owners in the new company, which will allegedly be called Saks Global. Canadian department store Hudson’s Bay is also helping to finance the deal by raising $2 billion from investors.
It would also end more than a century of local leadership for the storied Neiman Marcus department store chain, a brand that helped bring luxury retail to Dallas and cement North Texas as a hub for high-end shopping.
Neiman Marcus did not immediately respond to phone calls and emails requesting comment.
The new company, if approved by shareholders, would be a juggernaut in the luxury retail space as it would have a combined $10 billion in annual sales. It’s a deal that would help both companies as shoppers have begun to spend less on upscale products amid its competitors opening their own stores.
Neiman Marcus has 36 brick-and-mortar stores, two Bergdorf Goodman stores in Manhattan and five discount Neiman Marcus Last Call stores. That includes five Neiman Marcus stores in the Dallas-Fort Worth market. The company has about 10,000 employees nationwide.
Luxury retail rival Saks Fifth Avenue, which was started in New York City, has 41 stores nationwide for its flagship department store brand and 100 of its Saks Off 5th discount brand.
Neiman Marcus was founded in 1907 by Herbert Marcus Sr., his sister Carrie Marcus Neiman and her husband A.L. Neiman at the corner of Elm Street and Murphy Drive in downtown Dallas, just blocks from the current flagship store at Commerce and Ervay streets. The luxury retail department store has become known for introducing luxury designers to American shoppers, as well as its lavish and aspirational Christmas Book.
Neiman filed for bankruptcy protection in 2020 and emerged with a new set of owners including Pacific Investment Management Co., Davidson Kempner Capital Management and Sixth Street Partners.
Amazon is said to provide Saks Global with “technology and logistical expertise,” according to the WSJ. Meanwhile, Salesforce would help with adopting artificial intelligence. Saks Fifth Avenue, Hudson’s Bay and Salesforce also did not return requests for comment. Amazon declined to comment.
The deal, which has been in the works for months, will reportedly promote Saks’ chief executive of its e-commerce business, Marc Metrick, to the head of the combined company, Saks Global.
It’s unclear if either company’s operations will be affected by the deal through brand changes, but the long-rumored merger may help both companies consolidate real estate and staffing by trimming both, said Steve Dennis, president and founder of SageBerry Consulting and former senior vice president of strategy and multichannel marketing for Neiman Marcus Group.
“Some of their stores are just down the street from each other. So, essentially, you could ask the question of ‘Do you need both stores?’” he said. “There will be a lot to decipher from this, but I think it’s almost inevitable that they will prune their real estate and headcount.”
Dennis has predicted since 2020 that a deal between Neiman Marcus and Saks was nearly inevitable as both companies fight for the same crowd and combining into one would help in a fight against other industry giants like Gucci and Prada.
Neiman Marcus most recently posted an annual revenue of $4.5 billion in 2023, a much smaller amount compared to Gucci’s $10 billion annual revenue in 2023.
Though the deal could help Neiman Marcus and Saks, it could mean bad news for North Texans, Dennis said.
“I don’t think this is a happy outcome for Dallas-based folks,” he said. “While I doubt the Neiman Marcus name is going away, Saks would be crazy to rebrand Neiman stores, it’s still crazy to see an iconic Dallas company that’s been in business for over 100 years be subsumed by its bitter rival.”
