Saks Global, the parent company of Saks Fifth Avenue, has finalized its acquisition of luxury department store rival Neiman Marcus in a $2.7 billion deal. This merger, originally announced in July, has raised eyebrows in the upscale retail industry. The acquisition is backed by a diverse group of investors, including Amazon, Authentic Brands Group, Salesforce, and the Abu Dhabi Investment Council.
The deal, which also includes Neiman Marcus’ iconic Bergdorf Goodman, has prompted a reshuffling of key executive positions. Marc Metrick, the current head of Saks Fifth Avenue, has been appointed CEO of Saks Global. Emily Essner, formerly Saks Fifth Avenue's chief marketing officer, has been promoted to president and chief commercial officer of Saks Global. Additionally, Bill Bine, Neiman’s former chief supply chain officer, will join Saks Global as chief transformation officer.
Despite the changes, Bergdorf Goodman, which Neiman Marcus acquired in 1972, will continue to operate as an independent entity. Tracy Margolies, formerly Saks' chief merchandising officer, has been appointed president of Bergdorf Goodman, taking over from Darcy Penick.
Geoffroy van Raemdonck, who had served as CEO of Neiman Marcus since 2018, announced his departure from the company via LinkedIn.
Saks’ executive chairman, Richard Baker, who also owns Canadian retailer Hudson’s Bay, expressed optimism about the merger, stating it would create “an unparalleled multibrand luxury portfolio with tremendous growth potential.”
However, the deal has sparked some concerns within the retail sector. Reports suggest that Saks has been struggling with late payments to its vendors and financed the acquisition with junk bonds. Retail analyst Steve Dennis questioned the risks, pointing out the unusual nature of the financing.
Luxury expert Pam Danziger also raised alarms in Forbes, citing Richard Baker’s history of acquiring retail businesses with poor outcomes, such as Fortunoff and Lord & Taylor, both of which ultimately filed for bankruptcy. She also mentioned the sale of Gilt Groupe to Rue La La.
As for Saks and Neiman Marcus, both cater to the same affluent clientele, but Danziger warned that merging these competitive brands may not be well-received by customers, given the inevitable changes this acquisition will bring.