Saks Global, owner of Saks Fifth Avenue, has completed its long-awaited acquisition of department store rival Neiman Marcus—a merger that has caused some trepidation in the world of upscale retail.
The $2.7 billion deal, originally announced in July, is backed by an eclectic assortment of investors, including Amazon, Authentic Brands Group, Salesforce, and the Abu Dhabi Investment Council.
Saks’ acquisition, which includes Neiman-owned Bergdorf Goodman, has sparked a reshuffling in the company’s executive suite.
Marc Metrick, the current head of Saks Fifth Avenue, has been named CEO of Saks Global. Emily Essner was promoted from Saks Fifth Avenue chief marketing officer to Saks Global president and chief commercial officer. Neiman chief supply chain officer Bill Bine is joining Saks Global as chief transformation officer.
Bergdorf Goodman—which Neiman purchased in 1972—will remain a stand-alone business following the purchase. Tracy Margolies, who’d been chief merchandising officer for Saks, has become president of Bergdorf, replacing Darcy Penick.
Geoffroy van Raemdonck, CEO of Neiman Marcus since 2018, announced on LinkedIn he is leaving the company.
In a statement, Saks executive chairman Richard Baker, who also owns Canadian retailer Hudson’s Bay, said the merger will create “an unparalleled multibrand luxury portfolio with tremendous growth potential.”
Yet some in the retail industry expressed concern about the deal, given reports that Saks has been late paying its vendors and financed the transaction with junk bonds.
“Junk bonds to buy a luxury retailer at a price less than half of its value from a decade ago, on the part of a buyer who has struggled to pay its own bills? What could possibly go wrong?” retail analyst Steve Dennis posted on X.
In Forbes, luxury expert Pam Danziger wrote that Baker has “a poor track record in acquiring retail ventures,” citing his purchases of Fortunoff and Lord & Taylor, both of which ended up filing for bankruptcy. Another company Baker bought, e-tailer Gilt Groupe, was sold to Gilt’s longtime competitor Rue La La.
Saks and Neiman “draw from the same affluent customer base who may not take kindly to the inevitable changes this merger will bring,” Danziger wrote. “Two fierce competitive rivals don’t become friends overnight.”
(photo: iStock/John M. Chase)
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