Douglas Hand’s Post

Two titans of luxury department store retail are set to merge unless the FTC spoil the party. Saks Fifth Avenue Group has a 3 billion dollar on the table to acquire Neiman Marcus Group . Rumours have abound about this merger for months especially with Saks Fifth Avenue struggling to pay vendors and taking out loans to stay afloat. Which makes this deal somewhat fantastical when you think about the debt SaksFifthAvenue would have to take on to finalize this merger. It is also rumoured that Zalando would provide the funds for the deal What is the benefit of this merger? Perhaps some back office consolidation of buying, finance and operations but then I question what is the point as these two retailers co-existing in some markets like Miami are anchors in malls. Do they truly service difference customers? In Canada we have ended up with on luxury retailer which is Holt Renfrew. Saks Fifth Avenue with Canadian owner Hudson's Bay tried entering Canada with tepid results. With more and more luxury brands having their own stand alone retail and online presence is it as necessary to have multiple department stores? #luxuryretail #departmentstores #merger #acquistions #retail #retailing https://lnkd.in/gZ9nSs7N

https://lnkd.in/gyZgfifN Saks Fifth Avenue is set to acquire Neiman Marcus in a major move that’s poised to shake up the luxury retail world. By joining forces, these two iconic brands hope to create a new powerhouse in high-end shopping. This merger comes at a crucial time, as both companies are trying to adapt to changing consumer habits and the lingering effects of the pandemic. Neiman Marcus, in particular, has had a rough time lately, especially after its highly publicized bankruptcy in 2020. The hope is that partnering with Saks will help Neiman Marcus regain its footing and shine again in the luxury market. Personally, I’m not so sure this merger will be the silver bullet Neiman Marcus needs. The retail landscape has shifted dramatically, with more people, including myself, looking for affordable quality and unique thrift finds rather than splurging on traditional luxury goods. This trend means luxury retailers are having a harder time staying relevant. Even with Saks’ support, Neiman Marcus has a lot of work to do to win back the trust of shoppers. The damage from their 2020 bankruptcy is still fresh in many minds, and just teaming up with another high-end retailer might not be enough to fully restore their reputation.

This is one of the most interesting M&A deals to date. Amazon has been looking to enter the fashion industry for some time, and the real wildcard in this deal is Salesforce as a minority stakeholder. Consolidation within department stores continues. My mother was a buyer, and it is mind-blowing to hear her and my father talk about the selection of luxury goods that was available in each city’s department store. This is Saks’ second move with legacy luxury department stores, the first being a partnership with Barney’s. Luxury brands themselves are also pushing to drive direct business. #finance #mergers #retail #luxury #fashion

How does one struggling brand buy another? Saks, whose parent HBC needed to sell real estate assets to pay vendors, is able to raise money to buy a competitor. That is fascinating! It is a fascinating story that anyone would even finance this. It is a fascinating story on how to control more so that you can create supposed cost and buying synergies. It is fascinating that the WSJ spins this in the same way Luxury brands acquire other luxury brands...newsflash those luxury brands make money! It is a fascinating story that the owners of these brands are not in retail. It is a fascinating story that these brands have survived. There is nothing fascinating about this deal but high finance and powerplays. Neiman Marcus is a struggling brand that filed for Bankruptcy/restructuring of debt in 2020, shedding $4.0 Billion. Banks funding businesses/suppliers wrote off a lot of debt, and some businesses may have even failed. What will happen to Neiman Marcus? It will become commoditized, looking just like its other adopted stable of sibling brands. #retailing #strategy #ceo #technology #departmentstores #ecommerce

Hudson's Bay Company has announced its acquisition of Neiman Marcus for $2.65 billion USD. This move merges Neiman Marcus with Saks Fifth Avenue and Bergdorf Goodman under a new entity called Saks Global. Amazon and Salesforce join as investors, hinting at big changes in the luxury retail market. Stay tuned for more updates! #HudsonsBay #NeimanMarcus #LuxuryRetail #SaksGlobal #Amazon #Salesforce #RetailNews #BusinessUpdate #LuxuryFashion #Investments #RetailMarket

That Saks Fifth Avenue has reached a deal to acquire Neiman Marcus comes as no surprise. However, the plot twist is that Amazon will take a share in the new entity – something that adds a bit of spice to an otherwise predictable deal. Bringing Saks and Neiman Marcus together is something of a marriage of convenience. Both chains have struggled with growth, and both have concerns about their prospects. The rationale is that, together, they will have more financial firepower to negotiate with luxury brands and to cut out duplicative costs. However, a merger will not resolve all issues, especially those of the relevance of the chains in a market where more luxury players are pushing direct to consumer sales. As a larger entity, negotiating power will be better with the brands, but even a combined chain will not match the heft and power of some global luxury conglomerates, which will still hold most of the cards. Moreover, as many past acquisitions have shown, cost savings do not always materialize. As such, there is a risk that the deal might end up creating an even bigger headache for Saks. Amazon taking a stake in the business makes sense, as it has ambitions to play more heavily in the luxury space and this would give it some kind of toehold. However, the real win here would be the ability of Amazon to streamline logistics and ecommerce, giving the new entity an advantage in a market where remote shopping has become more important to shoppers – especially younger ones, which both chains need to do more to attract. However, details of the role Amazon will play are still very opaque. The big but in all of this is that before any deal can go ahead it will need to jump the hurdle of the FTC. While, rationally speaking, there is no substantial competitive concern with the two companies coming together, the FTC may well take a different position given its recent aggressive stance on mergers. #retail #retailnews #luxury #fashion #mergers #corporatedeals

The luxury market is the fastest growing segment in retail with estimated growth rate over next 5 years at 40%. If it’s going to happen the store nameplate’s should have 2 distinct strategies. Perhaps one store focuses on the young consumer and puts in the best technology shops in the world. Puts in cool younger brands and do collaborations with brands for elevated product from Champion, Nike & Addidas. Walk into Kith specialty store - thats what’s needed. Make 30% of the store sustainable product including an incredible pet shop store with only organic food and sustainable toys. Same for kids only sustainable clothes and toys. This would re-invent one of the stores completely and make relevant for younger consumers to get off their phones and get into their cars. And, the other more traditionally luxury more like Begdorf. I would put Linda Fargo over brand/.-assortment strategy. The North America Luxury Goods Market size is estimated at USD 103.10 billion in 2024, and is expected to reach USD 145.08 billion by 2029, growing at a CAGR of 7.07% during the forecast period (20242029). Source: www.mordorintelligence.com I think Neil Saunders makes some good points in terms of what Amazon can bring to the table in terms of back of house support but luxury brands are not going to sell on Amazon. When you search the brands you literally find a style with the quantity of 1. And, luxury good companies would want to push customers and their date to anywhere but their own stores. If I were them I would of gotten Armault in on this. He is the master of luxury. Another good point is that luxury stores want to sell their products In their own stores. And, if they are another store they are concession deals. So a long term strategy needs to be worked. Sit down with Arnault and cut a deal. No big picture growth strategy without Arnault brands is a big problem. Get Arnault brands and others will follow. Under the above scenario I approve. Otherwise I think bad idea. Best Neiman Marcus Group SaksFirst KITH Apple Gucci LVMH Dior Tiffany & Co. #sustainability #organic Amazon #technology

https://lnkd.in/eF2gPWmQ BREAKING Luxury Retailers Neiman Marcus And Saks Fifth Avenue Merging In $2.65 Billion Deal Backed By Amazon, Report Says Antonio Pequeño IV Forbes Staff Pequeño is a breaking news reporter who covers tech and more. Jul 3, 2024,06:23pm EDT TOPLINE Saks Fifth Avenue’s owner, Hudson’s Bay Co. closed a $2.65 billion acquisition of luxury retailer Neiman Marcus, according to The Wall Street Journal, which will merge Saks and Neiman with the help of Amazon and Salesforce amid a stagnating personal luxury market. Neiman and Hudson’s Bay’s boards approved the acquisition and may announce the blockbuster deal as soon as this evening, The Wall Street Journal reported. Amazon and Salesforce stepped in to help facilitate the merger and will take minority stakes in Saks Global—the name of the new company, according to Bloomberg, citing an unnamed person familiar with the matter. The deal will be financed with $2 billion that Hudson’s Bay raised from investors and bring 39 Saks Fifth Avenue stores and 36 Neiman Marcus stores under the merged company, Bloomberg reported. The acquisition of Neiman Marcus seeks to reduce costs and increase profitability, according to Bloomberg, as the personal luxury goods market continues to experience a slowdown in spending. Neiman Marcus and Hudson’s Bay did not immediately respond to Forbes’ request for comment. Get Forbes Breaking News Text Alerts: We’re launching text message alerts so you'll always know the biggest stories shaping the day’s headlines. Text “Alerts” to (201) 335-0739 or sign up here. TANGENT Amazon’s stock closed down more than 1% on Wednesday at $197.59 following news that its billionaire founder Jeff Bezos plans to sell $5 billion worth of Amazon shares. FORBES VALUATION We estimate Bezos’ net worth at $214.3 billion, making him the second-wealthiest person in the world behind Tesla chief Elon Musk ($248.7 billion). KEY BACKGROUND Neiman’s acquisition by Hudson’s Bay comes four years after the luxury retailer filed for bankruptcy following debt struggles and temporary store closures brought on by the COVID-19 pandemic. Meanwhile, Saks has dealt with liquidity issues and running behind on bills, according to CNBC. The companies have been in and out of merger negotiations for years, with Neiman most recently turning down a nearly $3 billion offer from Hudson’s in December.

Interesting article.

After examining recent deals in the last year, we’ve highlighted four 2024 M&A deal trends for the #retail industry. Read about each of the below trends here: https://lnkd.in/gdjYKpUh 1) Luxury Retail Consolidation to Fuel Growth 2) Convenience Stores Lead in M&A Activity Volume within Retail Industry 3) Large-scale Grocery Mergers Impact Customers 4) Retailers Opt for Partnerships to Expand Reach