Saks HBC parent company Neiman Marcus reaches $2.65 billion acquisition agreement

HBC, the parent company of luxury retailer Saks Fifth Avenue, has reached an agreement to acquire its luxury rival Neiman Marcus Group in a deal valued at $2.65 billion. The merger will create a new corporate entity called Saks Global, with e-commerce giant Amazon (AMZN) set to become a minority shareholder.

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This post was written by Angel Smith

Video Transcription

Saks Fifth Avenue parent company H BC said it will acquire Neiman Marcus Group for $2.65 billion.

Yeah, I want to say I wish I was more excited, but I think I was already there and I’ve talked to Mark Metric before.

I think he’s been working on it for a while.

So it was to be expected, but in reality, the event took place in the backdrop of a department store.

It continues to fall apart.

Macy’s is closing hundreds of stores, and I think ultimately it’s an e-commerce play for those companies and maybe the markdown business as well, I was going to ask you.

So I wondered, what is the future of the department store industry in general?

I think Macy’s gives you a taste of that.

You probably have 200-300 stores open in the best locations and everything else just doesn’t exist, so everything is online, it’s just online.

OK. This was supposed to be a sequel, but is there a connected e-commerce business?

I say this because I am a consumer myself and I think companies recognize this as well.

Everyone has almost everyone.

Now, they say that while some of the luxury houses they work with may not have an e-commerce presence, almost everyone does.

I usually have a general idea of what I want, and, you know, let’s call it, e-commerce warehouse, um, websites, you know, even the former Amazon sites, they’re not the most enjoyable experience, like browsing through different brands.

I really don’t know what I’m getting.

So if I’m on a linked Sachs Nieman website and I see a brand, I’d probably rather go to that brand’s website and check it out for myself.

It is more consistent within the brand.

That’s why the best choice is Louis Vuitton, which is very high.

It is therefore a brand that can decide on its own goals by opening stores.

If you want Louis Vuitton, you go to a Louis Vuitton store and experience it to the fullest.

It’s just a better experience.

Well, the thing is, the reason department stores were so successful is because people didn’t know what they wanted.

So what is the solution for online retailers today?

It’s inferential technology, in some cases AI, that tells you what you want and basically takes into account your purchasing history and then gathers enough information about you to suggest that either you’re running out of that or we’re going to generate demand in another part of your home or your lifestyle.

And then on top of that, the mall has been successful because of the traffic that’s moved online, or the new mall is basically available on the Instagram app, where you just search the web and you’re shown a bunch of ads, as if you were walking through the mall and the whole discovery process was happening virtually.

Yes.

And I think we talk a lot about our data and its integrity wherever it is.

But to get back to your point, Brad, I think at least I’ve made peace and I think a lot of people are um OK. Instagram knows almost everything about me.

Guess what?

Over time, they’ll probably start pointing me in the direction of something I’ll end up buying.

And I say: you know what I do?

I like it, that’s what I wanted.

Exactly.

And that’s okay.

You know, you would probably appreciate, I think the nuance here, I think the story here is that Amazon is a minority investor in this combined company because not only is it investing, but it’s also focused on logistics.

If I am UPS and FedEx.

I look at this and think to myself: Amazon really is playing the logistics game, that’s the hidden meaning.

That’s a whole other conversation we don’t have time for, but the point is what’s behind the question: what to do with these connected e-commerce sites?

The Amazon experience comes with a lot of issues that we could talk about for hours.

I wonder how the current team is doing given the pressures of AI?

What’s happening at AWS, what are they going to do with the retail part to make it more like an Amazon experience.

Sure, it has its benefits, but there are also a lot of downsides to using Amazon and a lot of other, you know, warehouse-type e-commerce sites today.

It’s not, um, the greatest experience I’ve ever had.

NO.

Well, sir.