Upon closing of the transaction, HBC will establish Saks Global, a combination of world-class luxury retail and real estate assets, including Saks Fifth Avenue, Saks OFF 5TH, Neiman Marcus and Bergdorf Goodman, each of which will continue operations under their respective brands.
HBC acquires Neiman Marcus Group for $2.65 billion to form Saks Global, which will include luxury brands Saks Fifth Avenue, Saks OFF 5TH, Neiman Marcus and Bergdorf Goodman. Marc Metrick will lead Saks Global. Amazon, Rhone Capital, Insight Partners and Salesforce will invest in Saks Global and substantial financing will be raised to support the acquisition.
Current Saks.com CEO Marc Metrick will become CEO of Saks Global, leading Saks Global’s retail and consumer businesses and driving the strategy to enhance the luxury shopping experience.
“We are thrilled to take this step to unite these iconic luxury brands, Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman. For years, many in the industry have anticipated this transaction and the benefits it would bring to customers, partners and employees. 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,” he said. Richard Baker, HBC Executive Chairman and CEO.
Saks Global is well positioned to grow in the luxury market following the recent transaction. The company will enhance the luxury shopping experience by investing in seamless access to a wide range of fashion across all channels and advancing online functionality and fulfillment processes. Saks Global will also focus on personalized customer service, leveraging artificial intelligence and first-party data to create individualized online shopping experiences and empower sales associates. Additionally, the company will continue its commitment to promoting established and emerging designers through enhanced e-commerce and strategically located stores. In addition, Saks Global will offer professional development opportunities, creating value for its employees in the evolving luxury industry, the companies said in a joint press release.
“Saks has remained steadfast in its commitment to being at the forefront of luxury fashion, serving customers not just where they are, but where they are going.” Metrics “We have great respect and admiration for NMG and the contributions its teams have made to the evolution of the company. Together, with our continued focus on innovation, we are poised to drive growth for our brand partners and create career development opportunities for the incredible talent at Saks Global.”
Geoffroy van Raemdonck, CEO of Neiman Marcus GroupSaks Fifth Avenue said: “This announcement 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. Saks Fifth Avenue shares our passion for connecting customers to the world’s finest luxury fashion. 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.”
Saks Global will also include HBC’s U.S. real estate assets and the Neiman Marcus Group’s real estate assets, creating a $7 billion portfolio of well-located retail real estate assets in premier luxury shopping destinations. Ian Putnam, currently Chairman and CEO of HBC Properties and Investments, will become CEO of Saks Global Properties and Investments, which will manage, maximize and enhance the company’s robust portfolio of assets. Both Metrick and Putnam will report to Baker, who will serve as Executive Chairman of Saks Global.
Following the close of the transaction, HBC's Canadian business will be recapitalized as a stand-alone entity, separate from Saks Global, with significantly reduced leverage and enhanced liquidity. HBC will continue to own all of its Canadian real estate and retail assets, including Hudson's Bay, which operates TheBay.com and the Hudson's Bay store network, as well as a C$2 billion real estate portfolio. As a result, HBC's Canadian business will be well positioned to support future growth, while continuing to serve its loyal Canadian customer base.
The boards of directors of HBC and Neiman Marcus Group have approved the transaction. The transaction is subject to receipt of required regulatory approvals and other customary closing conditions. Until closing, the businesses will continue to operate separately.
The purchase price is expected to be funded through a combination of equity capital from new and existing shareholders and credit facilities. Amazon will be an investor and will work with Saks Global to innovate on behalf of customers and brand partners following the close of the transaction. Rhône Capital, a transatlantic middle-market private equity firm and affiliated investment entities, will continue as the active lead investor in Saks Global. Global software investor Insight Partners, an investor in Saks.com, will be a shareholder in the new company. Salesforce will also become an investor upon closing, the statement added.
HBC has secured fully committed term financing of $1.15 billion from investment funds and accounts managed by affiliates of Apollo, and a fully committed revolving asset-based credit facility of $2 billion from Bank of America (lead underwriter), Citigroup, Morgan Stanley, RBC Capital Markets and Wells Fargo.
The transaction deleverages the combined company while ensuring that Saks Global, on a pro forma basis, will have significant liquidity.
Fibre2Fashion (KD) Press Desk
