Neiman Marcus Acquisition to Unite the Nation’s Two Largest High-End Department Store Chains

Although anticipated to “attract antitrust scrutiny from regulators,” if the acquisition of Dallas, Texas-based Neiman Marcus by Hudson’s Bay Co. (HBC) closes as planned, it will bring under one umbrella the “two largest high-end department store chains” in the U.S. when it joins the HBC-owned Saks Fifth Avenue chain. Headquartered in both New York and Toronto, and led by real estate scion Richard Baker, HBC is “acquiring Neiman Marcus Group for $2.65 billion. According to reported statements by HBC on Thursday, July 11.  To help facilitate the deal, Amazon and Salesforce will take minority stakes in the new company called Saks Global, which will handle the retail operations of 36 Neiman Marcus locations, plus the two Manhattan locations of Neiman’s affiliate Bergdorf Goodman, and 39 Saks Fifth Avenue stores — creating a combined U.S. “real estate portfolio worth $7 billion. A total of $2 billion raised from investors will finance the transaction along with $1.15 billion in debt financing provided by affiliates of Apollo Global Management. As part of financing efforts for the acquisition, HBC and its lenders had the Saks Fifth Avenue flagship at 611 Fifth Avenue appraised so it could serve as collateral to raise debt, and the resulting valuation of $3.62 billion was not only a “notable increase from an appraisal of $1.6 billion in 2019 and close to its value of $3.7 billion in 2014,” but also serves as a testament to the recent uptick in demand for high-end real estate in the area in that the landmark property is “now worth more than the $2.9 billion HBC paid for all of Saks 5^th Avenue when it acquired the company in 2013.”

Source:    https://www.crainsnewyork.com/retail/saks-owner-hudsons-bay-buys-neiman-marcus