Parent company of Saks Fifth Avenue to buy rival Neiman Marcus
NEW YORK -- The parent company of Saks Fifth Avenue has signed a deal to buy upscale rival Neiman Marcus Group, which owns Neiman Marcus and Bergdorf Goodman stores, for $2.65 billion, with online behemoth Amazon holding a minority stake.The new entity would be called Saks Global, which will comprise the Saks Fifth Avenue and Saks OFF 5TH brands, Neiman Marcus and Bergdorf Goodman, as well as the real estate assets of Neiman Marcus Group and HBC, a holding company that purchased Saks in 2013.HBC has secured $1.15 billion in financing from investment funds and accounts managed by affiliates of Apollo, and a $2 billion fully committed revolving asset based loan facility from Bank of America, which is the lead underwriter, Citigroup, Morgan Stanley, RBC Capital Markets, and Wells Fargo.The deal comes after months of rumors that the department store chains had been negotiating a deal.
But the twist is Amazon’s minority stake, which adds “a bit of spice” to an otherwise anticipated pact, according to Neil Saunders, managing director of GlobalData, a research firm.Salesforce, a cloud-based software powerhouse, will also become an investor at closing.The pact was announced Thursday after months of rumors that the department store chains had been negotiating a deal.
The Wall Street Journal first reported the impending deal Wednesday.“For years, many in the industry have anticipated this transaction and the benefits it would drive for customers, partners and employees," said Richard Baker, HBC executive chairman and CEO in a statement.“This is an exciting time in luxury retail, with technological advancements creating new opportunities to redefine the customer experience, and we look forward to unlocking significant value for our customers, brand partners and employees."Both Saks and Neiman Marcus have struggled as shoppers have been pulling back on buying high-end goods and shifting their spending toward experiences, like travel and upscale restaurants.
The two...