Saks Is Buying High-End Rival in a Deal That Cuts in Amazon

Saks Fifth Avenue and Neiman Marcus announced Thursday that after months of negotiations, they're ending their high-end competition. The boards of both privately held companies have approved the agreement, which calls for Saks' parent company to acquire its rival for $2.65 billion and create a new group called Saks Global, the Wall Street Journal reports. Amazon will supply the company with technology and logistical support and hold a minority stake. Salesforce also will be a minority shareholder. "For years, many in the industry have anticipated this transaction and the benefits it would drive for customers, partners and employees," said Richard Baker, who will be executive chairman of Saks Global.

Both retailers have struggled to hold onto shoppers, and Neiman Marcus filed for bankruptcy protection during the pandemic. Luxury spending fell 12% in March from the year before, Bank of America analysts found. Merging is usually "a sign of weakness in retail; it's typically not a sign of strength," said a retail expert. Other analysts said the merger could bring stability to the retailers in the face of slow growth, per the Washington Post. Saks Global project to have annual sales around $10 billion and more than 150 locations, which will include Saks Fifth Avenue, Saks OFF 5th, Neiman Marcus, and Bergdorf Goodman stores. (More mergers and acquisitions stories.)