Saks Fifth Avenue and Neiman Marcus might be headed down the aisle. The two luxury retailers are in talks to merge, according to the Wall Street Journal on Friday. But like past attempts at sealing a deal, the two parties are at odds. Saks, owned by the privately held HBC, offered a deal that valued its Dallas-based peer at $3 billion though Neiman is holding out for a bigger portion in cash, according to the report. It’s bad timing for a disagreement.
Both chains are struggling. Neiman went bankrupt in 2020, partly because of pandemic lockdowns and the huge debts piled on it by former owners Ares Management (ARES.N) and Canada Pension Plan Investment Board. HBC recently raised $340 million by selling some real estate assets to shore up its retailers, including Saks. By joining forces, Saks and Neiman would have more power negotiating with vendors and ability to control costs.
Consumers, however, even wealthy ones that the two retailers cater to, are spending their dough on travel and experiences. Bain and luxury Italian trade group Altagamma are expecting a softening in the high-end goods market next year. Saks and Neiman are destined to match up.(By Jennifer Saba)
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