HBC, parent company to Saks Fifth Avenue, has reached a definitive agreement with an announcement for acquisition purposes over Neiman Marcus Group. In a land-marked move, one that is certain to shake up the landscape for luxury retail, it comes with a price tag of $2.65 billion through one of the parent companies—Saks Global. Taken for effect, Saks Global will now be the home to some of the most prestigious names in luxury retail.
Formation of Saks Global
After the deal officially goes through, HBC is poised to introduce a new organization: Saks Global, to encompass Saks Fifth Avenue, Saks Fifth Avenue OFF 5TH, Neiman Marcus, and Bergdorf Goodman. Yet under its roof, each will retain its signature identity and operate autonomously, safeguarding the uniqueness of its brand legacy and customer journeys emerging from deep and sturdy roots.
“We are excited to complete this step in the creation of two growing, well-capitalized companies that are part of one of the world’s foremost retail conglomerates,” said HBC Executive Chair and CEO Richard Baker. “For years, many in the industry have anticipated this transaction and the benefits it would drive for customers, partners and employees.”
Strengthening Customer Relationships
Discussing the acquisition, Geoffroy van Raemdonck, president and CEO of Neiman Marcus Group, spoke to the strategic value the deal brought in creating synergies:
“This deal is a testament to our team’s unwavering commitment to building rewarding customer relationships, driven by our differentiated business model. We believe this is a proactive choice in an evolving retail landscape that will create value for our customers and brand partners.”
Navigating a Changing Retail World
The deal will also represent something of a troubled watershed for traditional department stores, which face a radically reshaping retail landscape. Last month, Macy’s said it would close 150 “underproductive locations” over the next three years to concentrate on growing its luxury brand business after sales tumbled in 2015.
Richard Baker was optimistic; he mentioned that the future of luxury retail has the emphasis on technological advances to define store experiences. He states, “I am thrilled with the prospects in luxury retail as advances in technology are creating new opportunities to reshape the customer experience and we can’t wait to begin unlocking meaningful value for customers, brand partners, and employees.”
Leadership and Vision for Saks Global
Saks, the online arm of Saks Fifth Avenue, will benefit from the merger as the CEO, Marc Metrick, becomes the fresh head of Saks Global to integrate the brands and move them forward to an innovation and growth-focused future.
“Saks has always stood strong in our commitment to be a leader in luxury fashion, meeting customers not just where they are, but where they are going,” said Metrick. “We are well-positioned to deliver for our brand partners and create career opportunities for the many talented individuals throughout Saks Global.”
Anticipated Benefits and Future Outlook
Many benefits can be derived from such consolidation of luxury retail giants, from operational efficiencies to better bargaining power with suppliers and the likely strengthening of the market position. HBC aims to deliver superior value to its customers and stakeholders by maximally leveraging the strength of each of its brands.
It will capitalize on the collective talent and resources of its constituent brands to bring new levels of innovation and luxury shopping. It will tap the power of digital technologies to create perfectly channel-agnostic, highly personalized customer interactions; consistently deliver the Saks experience across all customer touch points; drive the international business; and ensure sustainable practices throughout our supply chain.
Conclusion
The acquisition of the Neiman Marcus Group by HBC is really one bold strategic move in the luxury retail competitive sector, putting under one leadership with Saks Fifth Avenue, Saks OFF 5TH, Neiman Marcus, and Bergdorf Goodman, together—further cementing HBC at the very top—the marketplace. The company will maintain brand identity and enable innovation and growth in the future.
This will bring a sea change in the world of luxury retail, adding better value to customers, brand partners, and employees. With visionary leadership and clear strategic direction, the Saks Global will finally have a chance to create redefinition of the luxury shopping experience.
