Saks Global, $10 billion department store giant, is born
From the union of two of the largest and most historic American retail groups, Hbc and Neiman Marcus, a new formula that revives a category that has long been in crisis and focuses on luxury. Amazon participates with a minority stake to develop the digital offering
3' min read
3' min read
On the eve of the 4th of July and amidst the excitement surrounding Joe Biden's candidacy, a new giant has emerged in the United States that promises to change the fate, in recent years troubled, of the historic department stores: the Canadian group Hbc (Hudson's Bay Company), to which the Saks Fifth Avenue shops belong, has announced the acquisition of the Texan group Neiman Marcus (which also controls the Bergdorf Goodman shops) for $2.65 billion, an operation that marks the birth of the new Saks Global group, and a new, possible future for a sales channel that seemed headed, if not at an end, for drastic downsizing. According to the Wall Street Journal, which broke the news, the two groups would come to the agreement after a negotiation lasting several months, but their contacts would have been ongoing for some years.
Now Saks Global - whose property portfolio is estimated at around $7 billion and could reach $10 billion in revenues, again according to the WSJ - will be headed by 75 shops and 100 outlets, and the only rival will at this point be Macy's, another historic US sign (indeed, the oldest, which also owns Bloomingdale's and Nordstrom, which targets a lower end of the market and has long been undergoing a rethink of its formula and a downsizing of its once extensive network of shops in the US. Last December, the roughly $5 billion revenue group was the subject of a proposed purchase by the Arkhouse Management and Brigade Capital funds. And just a few hours ago the significant announcement of the sale of the historic Miami shop, opened in 1972, to the University of Miami (which should make it its own research centre) for $40 million.
What makes the transaction even more interesting is the participation of Amazon, which enters with a share in the capital of Saks Global and will probably provide its logistics platform and services to develop digital sales. That this front is of primary importance is also confirmed by the choice of Marc Metrick, ceo of Saks' e-commerce division, as head of Saks Global.
As the New York Times points out, however, this huge aggregation could now end up in the crosshairs of the Federal Trade Commission, which in September will begin examining the case of the acquisition of the Capri Group (which includes Versace, Michael Kors and Jimmy Choo) by Tapestry (which controls Coach, Kate Spade and Stuart Weitzman) for USD 8.5 billion, a deal that was concluded last August and created a group with potential revenues of USD 12 billion.
In 2021, the Hbc group, with Saks, had already been the driving force behind another operation that had revived Barneys, also an iconic New York department store, which was much admired for its pioneering strategies, but which had declared bankruptcy in 2019 and had then been taken over for USD 271 million by the Authentic Brands group: that year, a large 'Barneys at Saks' corner had opened at Saks Fifth Avenue. Recently, in Beverly Hills Saks moved its shop into the building that had housed Barneys, after a renovation that cost $52 million.
