Saks Fifth Avenue parent company HBC will reportedly buy rival Neiman Marcus, with Amazon taking a minority stake in the new company.
The boards of the two companies have approved the $2.65 billion transaction and the deal could be announced as soon as this evening, The Wall Street Journal (WSJ) reported Wednesday (July 3), citing unnamed sources.
Neither HBC, Neiman Marcus nor Amazon immediately replied to PYMNTS’ request for comment.
The combined company, which will be called Saks Global, would have annual sales of about $10 billion, according to the WSJ report.
Amazon, with a minority stake in the new firm, would provide Saks Global with its expertise in technology and logistics, the report said.
The new firm will be run by Marc Metrick, who is the chief executive of Saks’ eCommerce business, per the report.
There are no current plans to close stores, according to the report.
It was reported in December that Neiman Marcus had rejected a $3 billion takeover bid from Saks Fifth Avenue. At that time, the two luxury department store chains had been in negotiations for several months but had been unable to agree on the terms of a potential merger.
Negotiations were ongoing, however, and there were signs a deal could be reached in 2024, WSJ reported at the time.
A merger could potentially help both companies navigate the challenges of the luxury retail industry, in part by allowing them to negotiate better terms with suppliers and eliminate duplicate costs.
High-end department store chains like Saks Fifth Avenue and Neiman Marcus have been facing new challenges as luxury brands find ways to create direct relationships with their customers, PYMNTS reported in February.
As these brands deepen their direct relationships with consumers, businesses that have always profited from being the intermediaries are facing challenges.
In another recent challenge, Neiman Marcus reported a data breach that occurred on April 14, was discovered on May 24 and affected 64,472 customers. In a data breach notification filed with the Office of the Maine Attorney General, the company identified the incident as “external system breach (hacking).”
The post Report: Amazon Taking Minority Stake as Saks Buys Neiman Marcus appeared first on PYMNTS.com.
