Less than a month after high-end fashion retailer Saks Fifth Avenue announced it is acquiring its former rival, Dallas-based Neiman Marcus, the company will also be cutting 1% of its workforce, about 100 employees.
Saks recently agreed to acquire Neiman Marcus in a $2.65 billion deal which would bring on e-commerce giant Amazon and software firm Salesforce as minority stake holders in the new combined company.
“We are taking initial steps to establish Saks Global, a technology-powered combination of retail and real estate assets, including Saks Fifth Avenue and Saks OFF 5TH,” Saks Global said in a statement over email.
“As part of this, we are bringing together operational functions from across the businesses under one strong leadership team, so that each individual business can better focus on the execution of their respective customer-facing strategies,” the company’s statement said. “Additionally, with Saks Global we are capitalizing on an opportunity to ensure our teams can navigate the current environment while preparing for future opportunities.”
Still, the move to eliminate some of its employees was a difficult one, the company said.
“As a result of these changes, we have eliminated certain roles,” the company said. “Decisions that impact team members are never easy, but they are necessary to support our future success. We greatly appreciate our colleagues’ contributions and are supporting them as much as we can through this transition.”
But Saks and Neiman Marcus still have a major hurdle to clear.
Saks Global, the new proposed company, has to get the deal past the Federal Trade Commission. It’s something that could be tricky as, under the Biden Administration, regulators have been hesitant to allow mergers and acquisitions such as the proposed Kroger and Albertsons merger.
The layoffs also come at a time where there’s already been some movement at the top of Saks’ corporate structure. The company’s chief operating officer, RJ Cilley, said a few days after the announcement that he’d be leaving the company to become CEO of HVAC, plumbing, heating, and electrical distributor Voomi Supply.
Saks.com CEO Marc Metrick has also become CEO of Saks Global and will report to Saks Global executive chairman Richard Baker.
It’s still unclear how exactly the acquisition will impact the company’s banner stores but Saks said it is not planning on closing any stores. But Saks has previously said the move to team up with Neiman Marcus is all about growing.
Neiman Marcus has five stores in Dallas-Fort Worth and employs approximately 10,000 workers across the country.
Saks and Neiman Marcus have been in talks to become a singular company for years. Both fight for the same high-end customers and are competing with industry titans like Gucci and Prada. But if the deal goes through, it would spell the end of Neiman Marcus’ local Dallas leadership which has lasted more than 100 years.
