Hudson’s Bay Company (HBC), the parent company of Saks Fifth Avenue, is acquiring Dallas-based luxury retailer Neiman Marcus Group (NMG) in a $2.65 billion deal, HBC announced on July 4.
HBC said it will create a new luxury retail company called Saks Global, which will combine HBC’s Saks Fifth Avenue and Saks OFF 5th with NMG’s Neiman Marcus and Bergdorf Goodman, following the acquisition.
Each label will continue to operate under its existing brand. The Canadian retailer said that Saks Global will have a $7 billion portfolio comprising real estate assets of both HBC and NMG.
The boards of directors of both parties have approved the transaction, pending regulatory approvals and other customary closing conditions. The companies will operate separately until these conditions are met.
HBC said the acquisition will be funded through equity capital from new and existing shareholders and debt facilities. The company has secured a $1.15 billion loan from investment funds and accounts managed by affiliates of Apollo Global Management and a $2 billion revolving asset-based loan facility from several banks.
Amazon will be an investor in Saks Global and work with the new entity following the transaction. Private equity company Rhône Capital will be the active lead investor in Saks Global, according to the statement.
Marc Metrick, CEO of Saks.com, will become CEO of Saks Global. Ian Putnam, president and CEO of HBC Properties and Investments, will lead Saks Global’s property and investment business. They will report to Mr. Baker, who will serve as executive chairman of Saks Global.
NMG CEO Geoffroy van Raemdonck described the acquisition deal with HBC as “a proactive choice” for creating value for NMG’s customers and brand partners amid “an evolving retail landscape.”
“With our complementary capabilities and a new long-term capital structure, the combined group will position our iconic Neiman Marcus and Bergdorf Goodman brands for continued success,” he said.
Neiman Marcus filed for bankruptcy protection in May 2020 during the first months of the coronavirus pandemic but emerged in September of that year. Like many of its peers, the privately held department store chain was forced to temporarily close its stores for several months.
