A new luxury retail empire has been created.
Late Monday afternoon, Saks Global disclosed that it has finalized its acquisition of Neiman Marcus Group for a total enterprise value of $2.7 billion, as has been expected. The agreement by Saks to buy the Neiman Marcus Group was announced in July 2024.
Saks Global now includes Neiman Marcus, Bergdorf Goodman, Saks Fifth Avenue and Saks Off 5th, and represents a total volume of approximately $10 billion.
Richard Baker, executive chairman of Saks Global, said in a statement, “This milestone transaction marks a transformative moment for Saks Global and the luxury retail industry. By uniting Neiman Marcus, Bergdorf Goodman and Saks Fifth Avenue, we have created an unparalleled multibrand luxury portfolio with tremendous growth potential. With data and innovation at our core and a portfolio of prime real estate, we aim to redefine the luxury shopping experience.”
Along with the announcement of the closing, Saks disclosed several fundamental changes in how Saks Global will operate and integrate the Neiman Marcus Group, as well as a flurry of executive changes at the top rungs of the enterprise and executive departures.
Saks and Neiman Marcus will be managed by one team, whereas Bergdorf Goodman will be managed separately, according to Marc Metrick, who takes on the role of chief executive officer of the Saks Global Operating Group.
Also, Ian Putnam will serve as CEO of Saks Global Properties & Investments. Both Metric and Putnam will report to Baker.
Emily Essner, forrmerly chief marketing officer at Saks, has been promoted to a new role – president and chief commercial officer, in which she will oversee the merchandising, marketing, commercial analytics and e-commerce for Saks and Neiman Marcus. “She’s got all things consumer related,” Metric told WWD in an interview Monday evening. “Her team will be supporting the Saks and Neiman’s stores and websites.
Tracy Margolies, who was chief merchandising officer for Saks, has been appointed president of Bergdorf Goodman. She succeeds Darcy Penick. Margolies, who before joining Saks worked at Bergdorf’s, has been “a key partner of mine,” Metric said. “Tracy’s deep expertise and track record of leading results-driven strategies will propel Bergdorf Goodman into the future while honoring its unique legacy. I am confident she is the right person to lead this storied business’ next chapter and look forward to what Bergdorf Goodman will accomplish under her leadership.”
“We are going to do things very differently,” Metrick added. “You will not see some of the same traditional roles, like chief merchant. Saks Global plans to break the mold in how we go to market and how its business runs.”
Metrick also underscored that Saks Global will adopt A-I “in the right places for greater personalization and to maximize the customer experience.”
Others leaving Neiman’s as a result of the acquisition include Geoffroy van Raemdonck, NMG’s CEO; Ryan Ross, president of Neiman’s and head of NMG customer insights; Lana Todorovich, chief merchandising officer at Neiman’s, and Katie Anderson, NMG’s chief financial officer.
“The big takeaway first is that we believe there is a ton of talent at Neiman Marcus Group,” Metrick said. “When we get into the integration as we move forward, there will be a lot of cross pollination between the companies.” He pointed out that Bill Bine, NMG’s former chief supply chain officer, will fill the new role of chief transformation officer of Saks Global. “A highly strategic, results-oriented executive, Bill’s significant experience leading large-scale business transformation and operations in retail will be instrumental to our integration journey,” said Metrick.
Also, some changes in how the deal to buy Neiman’s ended up being structured were disclosed. Earlier this month, Saks issued a $2.2 billion bond replacing financing that would have come from private equity giant Apollo. But Amazon and Salesforce continue as investors, along with Authentic Brands Group as well as G-III Apparel Group which more recently came in as investors. Saks did not specify how much each of the four companies contributed.
Saks, for several seasons now, has been delinquent on payments to many vendors. But Metrick told WWD that the transaction “recapitalizes the company and puts us in a much better cash position and much better position operating the business.” Metrick also said that starting January, “We will begin the process to work through the delayed payments. It will begin the first week of January. That’s when the process starts.”
In his memo to the team on Monday, a copy of which was obtained by WWD, Baker wrote: “I’m pleased to share that with the closing of the transaction, Saks Global has greater financial stability with less leverage and a newly-funded revolving line of credit, providing significant levels of available liquidity. This financial structure enables us to make investments to better serve our customers and be a better partner to our vendors.
“With the closing of the NMG transaction, HBC’s Canadian business has been recapitalized as a standalone entity, separate from Saks Global, with significantly reduced leverage,” Baker wrote. “HBC will continue to operate Hudson’s Bay stores and TheBay.com, as well as continue to own or lease a 2 billion (Canadian) dollar real estate portfolio, either entirely or with its joint venture partner, RioCan Real Estate Investment Trust. With a new financial structure, HBC’s Canadian business will be set to execute on its business plan and best serve its loyal Canadian customers.”
Metrick also issued a memo, a copy of which was obtained by WWD, where he wrote, “Bringing these iconic brands together is a significant step forward for luxury retail. As one company, we have an opportunity to transform the way we serve consumers, blending art and science to ensure each customer’s experience is unmistakably their own. With deep relationships across the industry, cutting-edge personalization and strategic technology partnerships, we are poised to drive innovation and growth. I look forward to working with the many talented leaders and employees from NMG and across Saks Global as we embark upon our journey to bring these businesses together.”
While the deal creates a luxury retail empire in America, it raises various questions about potential consolidations involving functions, stores and personnel. Asked about consolidations, Metrick replied, “This is about transformation, not consolidation. It’s about growth…There are redundant functions that are going to be rationalized. It will be a process we go through over time.”
As previously reported, Saks plans to close its store on Worth Avenue in Palm Beach, Fla. next year, and is closely reviewing the Saks and Neiman Marcus store fleets.
Other Neiman’s executives departing the business are Eric Severson, chief people, ESG and belonging officer; Ann Marie Janke, chief technology and information officer; Tiffin Jernstedt, chief communications officer, and Tom Mattei, chief legal officer, corporate secretary, chief compliance officer.
In January, Metric is scheduled to hosting a Saks Global town hall for the newly combined organization. Details will be announced soon. Under the combined organization, Metric has 11 senior officials reporting to him, including Bine, Margolies, Essner as well as Kim Miller, president of Saks Off 5th; Rob Brooks, chief operating officer; Larry Bruce, president of stores for Saks and Neiman’s; Sarah Garber, chief people officer; Sarah Garber, chief people officer; Mike Hite, chief technology officer; Caroline McMurray, vice president of strategy; Jeff Pedersen, chief financial officer, and Andrew Woodworth, chief legal officer.
