Saks Fifth Avenue’s parent company is nearing a $2.65bn deal to buy luxury rival Neiman Marcus, backed by Amazon and Salesforce, according to sources.

The deal, resulting from months of complex negotiations, aims to combine two leading luxury retailers under one roof to better compete with giants like LVMH, which owns brands such as Dior and Louis Vuitton. Amazon and Salesforce are expected to take minority stakes in the newly formed business, marking an unusual entry into the luxury market. Marc Metrick, leader of Saks’ ecommerce business, will become the CEO of the new company.

Saks and Neiman Marcus Near $2.65bn Merger Deal
Luxury department stores have faced significant challenges in recent years, contending with increased competition from direct-to-consumer sales by manufacturers.

Luxury department stores, reliant on in-person sales, face declining market share as shoppers increasingly buy directly from brand websites or through e-retailers. This pressure has driven some brands into financial distress; Neiman Marcus declared bankruptcy during the pandemic, along with Lord & Taylor. Speculation about a merger with HBC, which also owns Hudson’s Bay, has circulated since Neiman Marcus emerged from bankruptcy in late 2020.

The new entity, to be called Saks Global, will become the largest player in brick-and-mortar luxury storefronts, operating about 75 main stores. Despite this, it will face stiff competition as customers continue to favor direct brand purchases, with LVMH having a market capitalization of about $384bn.

HBC, which acquired Saks over a decade ago, is financing the deal with a $2bn facility, while Apollo Global Management is providing $1.15bn in debt.