Luxury Retailers Neiman Marcus and Saks Fifth Avenue Discuss Potential Merger

Luxury retailers Neiman Marcus and Saks Fifth Avenue are reportedly in talks to merge.

This potential merger comes as Neiman Marcus has been actively seeking a buyer due to a downturn in its business, the New York Post reported Monday (Aug. 28), citing unnamed sources.

Neiman Marcus and Saks Fifth Avenue did not immediately reply to PYMNTS’ request for comment.

Neiman Marcus, which not only owns its eponymous luxury chain but also Bergdorf Goodman in New York, has been facing challenges in recent years, with sales cooling off amidst a slowdown in luxury spending, according to the report. In fact, Neiman Marcus experienced its worst fiscal year since its 2020 bankruptcy this year.

The luxury retailer is expected to sell for about $2 billion, which is significantly less than the price it fetched in 2005 during a series of debt-fueled buyouts that ultimately burdened the company, the report said. Previously, Neiman Marcus’ current private equity owners had been divided over a potential exit, with minority investors advocating for an immediate sale while the majority investor argued that the business would improve.

Saks Fifth Avenue, owned by Hudson’s Bay Co., has made two attempts to acquire Neiman Marcus in the past decade, but these previous efforts fell through due to the high price tag, per the report. However, this time, the talks seem to be progressing, with Hudson’s Bay conducting exclusive due diligence to evaluate Neiman Marcus’ business.

If the merger goes ahead, it is likely to face antitrust scrutiny, given that the combined entity would have a significant presence in the luxury retail market, according to the report. However, both companies could argue that their dominance in luxury has waned over the past decade with the rise of eCommerce.

For its part, Saks Fifth Avenue has leaned into exclusivity. For example, the luxury retailer expanded its exclusive top-client program, Saks Limitless, in April. This program caters to clients across the Saks Fifth Avenue ecosystem and aims to enhance its personal styling capabilities and brand loyalty efforts both digitally and in-person.

In another move, the retailer partnered with the Kim Kardashian-created brand Skims to create a shop-in-shop experience at the New York flagship store and on Saks.com.