Amazon has bought a minority stake in luxury department store chain Neiman Marcus in a bid to expand its reach into more markets (via Engadget).
Despite revolutionizing e-commerce over roughly two decades, Seattle-based Amazon has failed to penetrate the luxury goods sector, highlighting the vast amount of data the company is prepared to collect.
With this new strategic move, Amazon aims to leverage its data and logistics expertise to bring the luxury retailer up to speed while gaining greater insight into more spending habits.
Amazon buys stake in Neiman Marcus
Saks Fifth Avenue and its parent company Hudson's Bay Company announced the acquisition of Neiman Marcus for $2.65 last week (via The Wall Street Journal). The deal consolidates two of the largest luxury retailers in the United States, while Amazon's role as a minority investor depends on regulatory approval.
If successful, Amazon will contribute to the deal by gathering and analyzing high-quality customer data to deliver more personalized shopping experiences and improved logistics in a setup that will benefit both Amazon and the new owners of Naiman Marcus.
However, Amazon’s efforts to enter the luxury market have received mixed reviews in the past. In 2016, LVMH said that Amazon’s business was not a good fit for its own, adding that customers of high-end products from brands such as Louis Vuitton, Dior and Givenchy prefer to buy directly from its own stores or from certain resellers.
The size of Amazon's stake is not yet confirmed, but Neiman Marcus and Saks are expected to generate $10 billion in combined annual sales, so it could prove to be a lucrative deal.
Amazon declined to comment further.
