Combination expected to fuel growth and benefit
customers, brands and employees by meeting the increasing demands
of the rapidly evolving luxury retail industry
- The transaction brings together three iconic luxury
destinations to better serve customers, employees and brand
partners, supported by a portfolio of prime retail real estate
assets in top-tier luxury locations
- Saks Global will be well positioned to meet customers’
increasing demands for a highly personalized, seamless experience
with greater opportunities for product discovery across all
channels
HBC, parent company of Saks Fifth Avenue, has entered into a
definitive agreement to acquire Neiman Marcus Group (“NMG”), parent
company of Neiman Marcus and Bergdorf Goodman, for a total
enterprise value of $2.65 billion. Upon transaction close, 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.
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“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.”
Compelling Strategic Rationale Benefiting Customers, Brands
and Employees
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 that
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 our 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 better serve customers.
- 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.”
Geoffroy van Raemdonck, Chief Executive Officer of Neiman Marcus
Group, 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 with the world’s best
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
Upon closing of the transaction, Saks Global will comprise the
Saks Fifth Avenue, Saks OFF 5TH, Neiman Marcus and Bergdorf Goodman
brands, which will continue operations under their respective brand
names.
Saks Global will also include HBC’s U.S. real estate assets and
Neiman Marcus Group’s real estate assets, creating a $7 billion
portfolio of well-located retail real estate assets in top-tier
luxury shopping destinations. Ian Putnam, currently President 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 Mr. Metrick
and Mr. Putnam will report to Mr. Baker, who will serve as
Executive Chairman of Saks Global.
HBC’s Canadian Retail and Real Estate Assets
Upon closing of 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 wholly own its Canadian retail and real estate
assets, including Hudson’s Bay, which operates TheBay.com and the
Hudson’s Bay network of stores, as well as 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.
Transaction Details
The Boards of Directors of HBC and Neiman Marcus Group have
approved the transaction. The transaction is subject to the receipt
of required regulatory approvals, and other customary closing
conditions. Until closing, the companies will continue to operate
separately.
The purchase price is expected to be funded by a combination of
equity capital from new and existing shareholders and debt
facilities. Amazon will be an investor in and work with Saks Global
to innovate on behalf of customers and brands 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 at closing.
HBC has secured a $1.15 billion fully committed term loan
financing from investment funds and accounts managed by affiliates
of Apollo, and a $2 billion fully committed revolving asset based
loan facility from Bank of America (lead underwriter), Citigroup,
Morgan Stanley, RBC Capital Markets, and Wells Fargo.
The transaction deleverages the combined enterprise while
ensuring that Saks Global, on a pro forma basis, will have
significant liquidity.
Advisors
M. Klein & Company is serving as the lead financial advisor
and capital markets advisor to HBC on the acquisition of Neiman
Marcus Group and related financings. Solomon Partners is also
serving as a financial advisor to HBC. Elm Street Advisors is
serving as strategic, commercial and operational advisor. Deloitte
is serving as a financial and tax advisor to HBC.
Willkie Farr & Gallagher LLP is serving as legal counsel to
HBC.
J.P. Morgan and Lazard are serving as financial advisors to NMG.
Sullivan & Cromwell, LLP is serving as legal counsel to
NMG.
Berenson & Company served as financial advisor to Insight
Partners.
About HBC
HBC is a holding company of investments and businesses at the
intersection of technology, retail operations, and real estate.
It is the majority owner of iconic ecommerce companies: Saks, a
leading online destination for luxury fashion, and Saks OFF 5TH, a
premier luxury off-price ecommerce company offering top brands at
the best prices. These businesses were established as separate
operating companies in 2021. HBC also wholly owns Hudson’s Bay, a
leading premium retailer in Canada operating a national network of
stores and TheBay.com, as well as SFA, the operator of Saks Fifth
Avenue’s physical locations, and O5, the operating company for Saks
OFF 5TH stores.
With assets spanning top markets and prime locations across
North America, HBC owns or controls—either entirely or with joint
venture partners—approximately 42 million square feet of gross
leasable area. HBC Properties and Investments, the company’s real
estate and investments portfolio business, manages these assets
along with additional real estate offerings, including Streetworks
Development, its property development division.
Founded in 1670, HBC is North America’s longest continuously
operating company, with headquarters in New York and Toronto. For
more information, visit www.hbc.com.
About Saks Fifth Avenue
Saks Fifth Avenue is the leading name in luxury shopping. Since
1924, the brand has maintained a reputation for delivering an
expertly curated assortment of fashion and highly personalized
service. The Saks Fifth Avenue experience offers seamless
all-channel shopping through an elevated digital platform and
in-person services provided by an extraordinary network of 39 Saks
Fifth Avenue stores across North America.
Shop on Saks.com and the Saks app, or visit Saks.com to find a
Saks Fifth Avenue store location near you. Follow @saks on
Instagram, TikTok and Facebook, @thesaksman on Instagram and @Saks
Fifth Avenue on LinkedIn.
About Neiman Marcus Group
NMG is the parent company of leading U.S. multi-brand luxury
retailers Neiman Marcus and Bergdorf Goodman. The company
successfully transformed itself into a profitable luxury
relationship business by Revolutionizing Luxury Experiences for
customers, brand partners, communities, and associates. Its
differentiated business model is anchored around integrated retail,
an expertly curated product assortment, and a sales-assisted
approach. The company’s culture of Belonging, powered by its
10,000+ associates, celebrates the individual talents that form its
collective strength. NMG WOW, its unique and flexible integrated
working philosophy empowers associates to do their best work. For
more information about NMG, visit neimanmarcusgroup.com or follow
the company on LinkedIn, Instagram, and YouTube.
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For HBC and Saks
sakspress@saks.com
For Neiman Marcus Group
pr@neimanmarcus.com
For Rhône Capital
Brunswick Group
RHONE@brunswickgroup.com