Hudson's Bay Company (HBC) is set to acquire US-based Neiman Marcus Group, the parent company of Neiman Marcus and Bergdorf Goodman, in a $2,650,000,000 billion deal financed with Amazon's assistance. This will consolidate these luxury retailers under a new corporate entity named Saks Global, enhancing HBC's portfolio to include Saks Fifth Avenue, Saks OFF 5TH, and now Neiman Marcus and Bergdorf Goodman. The strategic formation of Saks Global aims to leverage the market strength of these high-end brands, creating a formidable presence within the luxury retail sector.
“We're thrilled to take this step in bringing together these iconic luxury names, Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman,” said Richard Baker, HBC Executive Chairman and CEO. “For years, many in the industry have anticipated this transaction and the benefits it would drive for 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.”
Despite this major acquisition, HBC's Canadian operations will remain distinct and autonomous from the newly formed Saks Global. The separation entails HBC retaining full ownership of its Canadian retail and real estate assets, including its flagship Hudson's Bay department stores. These assets, valued at an estimated $2 billion, along with other Canadian ventures, will continue to fall under the exclusive control of HBC's Canadian division. This bifurcation will allow each entity to focus more intently on its distinct markets and operational models.
Following the closing of the transaction, Saks Global will be well-positioned to meet luxury consumers’ evolving expectations by:
- Advancing the luxury shopping experience. Saks Global will invest in the luxury shopping experience, ensuring customers can seamlessly access a broad fashion assortment through their channel of choice. Building on each retail brand’s history of innovation, Saks Global will drive further advancements in online functionality and fulfillment processes while providing greater access to merchandise.
- Serving customers through personalized interactions. High-touch, personalized experiences are fundamental to luxury shopping. Saks Global will bolster its technology-driven approach to personalization, leveraging first-party data and AI to create individualized online shopping experiences and empower sales associates to serve customers better.
- Supporting established and emerging brands. For over 100 years, Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman have been deeply committed to helping luxury consumers discover the latest fashion from established and emerging designers. Through its improved ecommerce experience and well-located store fleet, Saks Global will help emerging and established brands reach their target customers.
- Creating value for employees. Well-positioned to succeed in the evolving and growing luxury industry, Saks Global will offer value and career development opportunities to employees.
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 advance the luxury shopping experience.
“Saks has remained steadfast in our commitment to be at the forefront of luxury fashion, meeting customers not just where they are, but where they are going,” Mr. Metrick said. “We have respect and admiration for NMG and the contributions its teams have made in the company’s evolution. Together, with our ongoing focus on innovation, we are primed to drive growth for our brand partners and create career development opportunities for the incredible talent across Saks Global.”
HBC's restructuring is decisive, blending its storied past with its future ambitions. The company, which commenced as a fur trading business deeply entwined with the colonization and development of Canada, has evolved into a multifaceted retail and real estate conglomerate headquartered in Toronto. Today, HBC operates nearly 239 stores and employs around 22,000 people across Canada and the United States. This reorganization aligns with CEO Richard Baker's vision to streamline HBC operations and carve out a niche in physical and digital retail environments.
Retail expert, Jeanel Alvarado suggests that HBC can gain valuable insights from Saks Global’s operations to enhance its Canadian retail strategies. The insights and methodologies gained from managing a conglomerate of high-end retail brands could provide HBC with fresh perspectives to invigorate its iconic Hudson's Bay stores, which are widely known for their presence and influence in Canada.
Upon closing the transaction, HBC’s Canadian business will be recapitalized as a standalone entity, separate from Saks Global, with significantly reduced leverage and enhanced liquidity. HBC will continue to own its Canadian retail and real estate assets, including Hudson’s Bay, which operates TheBay.com and the Hudson’s Bay network of stores, and a CAD$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.
