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Everyone's trying to figure out what the Saks Fifth Avenue acquisition of Neiman Marcus Group is going to mean in the luxury market. I took a look and here's how I read it, in my latest Forbes.com post with Warren Shoulberg Richard Kestenbaum Marc Metrick Pete Nordstrom Nordstrom #luxuryretail #luxurymarket #mergersandacquisition #luxuryconsumers #luxurycustomers #luxuryshopping

Thanks Beauty Independent and Erica La Sala for sharing my thoughts on the Saks Fifth Avenue / Neiman Marcus Group deal and how it might impact the luxury beauty market and the department store channel overall. Some of my key takeaways: ▶ The Saks/Neimans merger is occurring amidst significant department store challenges as growth has shifted to specialty retailers like SEPHORA and Ulta Beauty. ▶ The declining department store channel has historically been key for luxury beauty brands which could face reduced retail options and leverage as a result of the merger. ▶ This further emphasizes the need for luxury beauty brands to pursue direct-to-consumer growth strategies leveraging their high AOV and gross margin profiles to support profitable new customer acquisition growth. ▶ Perhaps the combination of Saks and Neiman Marcus will allow for a more enhanced retail experience overall that is even better suited for luxury beauty in the future - only time will tell. Great insights also shared by Kelly St. John, Tina Henry Bou-Saba, Karen Hayes and other beauty industry colleagues! True Beauty Ventures #beautyinvesting #beauty #VC https://lnkd.in/eswm8YD3

With the dust selling on the announcement that Saks and Neiman Marcus will merge, many businesses and brands are trying to understand the impact of the two firms coming together. It was great to chat with Beauty Independent about what the deal potentially means for the beauty sector and the brands selling to either or both department store businesses. One of the key takeaways is that while both stores operate in the luxury space, they each have their own positions and customers so there won’t be a merger of the propositions. Brands will still need to understand the nuances and specifics of each business. More in the article: https://lnkd.in/eksUQ2KX #retail #retailnews #departmentstores #beauty #luxury

Clarkston's Sarah Covill Broyd commented on the recent new that Saks Fifth Avenue parent company Hudson's Bay Company is acquiring Neiman Marcus Group. "With the rise of #luxury brands and the decline of #departmentstores, the #merger between Saks and Neiman Marcus will create greater power on their side for negotiations across brands and products. Consolidating two stores with high level of overlap in #brands, offerings and consumers will increase their strength in negotiating against brands. Given their similar #consumer sets and stores, I suspect they will consolidate their real estate and corporate functions. Beauty companies should expect increased pressure from the retailer, but likely less storefronts to sell into. In most department stores, the #beauty counter typically brings in a significant portion of the foot traffic, so brands have leverage. Luxury department stores also understand they also contending with prestige brands being sold at other retailers like Ulta and Sephora ..." Continue reading in the Beauty Independent article here: https://hubs.ly/Q02GsH8T0

“This transaction (finally) acknowledges the reality that the North American luxury department store model has been under assault and in contraction mode for some time. While putting two fairly mediocre companies together does not guarantee remarkable success, it does create the underlying conditions for a better future.” “While it remains unclear the precise role of Amazon and Salesforce as partners in the new entity, both bring potentially powerful financial and technology capital to the table.” “Aside from decisions about the ultimate new organizational structure, many vexing decisions lie ahead, most of which center on whether and how to further differentiate the two primary nameplates and how aggressive to be about consolidation of the many overlapping store locations.” “Historically, the Neiman Marcus locations are typically and comfortably the most productive, and in a world where digital growth is materially outpacing transactions rung up in a store and where competition from vendors’ own stores is being dramatically ramped up, it’s fair to say that many stores are way bigger than they need to be. In cases where two virtually identical concepts have large stores in essentially the same trade areas, the financial upside from closing the weaker location could be enormous.” “While many have suggested that Saks Fifth Avenue could be more clearly repositioned toward the “accessible luxury” space, while Neiman Marcus could solidify its position in “true luxury,” this isn’t so clearly a workable strategy. Having Saks trade-down would bring it more obviously in direct competition with Nordstrom’s full-line stores (which have struggled for years to grow their top line) and Bloomingdale’s, both of which often have stores in the same mall as Saks.” “One of the reasons Neiman Marcus has struggled is the misguided belief that it was smart to focus more heavily on its very top customers. This is eminently sensible if you want to be a 15 store chain with far smaller stores, but with more than half of its sales coming from outside that cohort, the economics of its current store size and real estate strategy would become even more challenging.” - Steve Dennis

Exciting times ahead for luxury retail! The integration of technology is transforming the industry, and it's clear that luxury can't thrive without it. Understanding customer needs in physical retail and leveraging technology to enhance their experience is crucial. From locating items and visualizing them on similar people to improving the roles of sales associates and upgrading fitting rooms, the possibilities are endless. I enjoyed this article sharing some details: 1. Acquisition Details: Hudson's Bay Company (HBC), owner of Saks Fifth Avenue, is acquiring Neiman Marcus Group for $2.65 billion. 2. Formation of Saks Global: The new entity, Saks Global, will encompass Saks Fifth Avenue, Saks OFF 5th, Neiman Marcus, and Bergdorf Goodman, along with substantial real estate assets. 3. Financial Backing: The deal is backed by equity and debt, with significant contributions from Amazon Salesforce and leading banks. 4. Retail Impact: This merger aims to stabilize and expand luxury retail amidst declining department store sales and traffic. 5. Future Operations: Each brand will retain its identity under the new conglomerate, which is projected to generate $10 billion in sales. Read more: https://lnkd.in/eGeT_wzs.

Saks will now have Neiman Marcus, Bergdorf Goodman, Saks Fifth Avenue, and Saks OFF 5TH in its portfolio. Under the agreement, first reported this summer, Saks will acquire 36 Neiman Marcus stores across key states like California, Texas, Florida, Illinois, and New York. The acquisition was funded with equity contributions from major players like Amazon, Salesforce, and Authentic Brands Group (known for Reebok, Forever 21, and Billabong). According to Bloomberg, the move aims to boost profitability by leveraging stronger vendor relationships and reducing supply chain costs.

Saks will now have Neiman Marcus, Bergdorf Goodman, Saks Fifth Avenue, and Saks OFF 5TH in its portfolio.⁠ ⁠ Under the agreement, first reported this summer, Saks will acquire 36 Neiman Marcus stores across key states like California, Texas, Florida, Illinois, and New York. The acquisition was funded with equity contributions from major players like Amazon, Salesforce, and Authentic Brands Group (known for Reebok, Forever 21, and Billabong).⁠ ⁠ According to Bloomberg News, the move aims to boost profitability by leveraging stronger vendor relationships and reducing supply chain costs.

Saks Fifth Avenue & Amazon to buy Neiman Marcus Group for $2.65 Billion The acquisition of Neiman Marcus Group makes Saks Global, as the new group will be called, the dominant player in its market, with a combined 75 stores (including two Bergdorf Goodman locations), as well as 100 off-price outlets. The new group’s only real rivals in the United States will be Macy's which includes Bloomingdale's, and Nordstrom. Amazon will take a minority stake in the new company and will provide technology and logistical expertise. Another minority shareholder is Salesforce. Interesting to see large tech and e-commerce companies continue to invest in brick & mortar retail... https://lnkd.in/gi-zQ3R2 #retailrealestate #luxaryretail #consumerspending #cbre #amazon #saks #neimanmarcus

Is the Saks acquisition of Neiman Marcus a good move? Saks Fifth Avenue's parent company, HBC, has announced the acquisition of Neiman Marcus for $2.65 billion, which, once the transaction is finalized, will establish a new luxury retail powerhouse named Saks Global. How might the two brands avoid losing their identity and positioning in the competitive luxury retail market? Read the full article here: https://lnkd.in/gRNpNrqe Paula Rosenblum "I don’t see how putting these underperforming retailers together creates differentiated, accretive but profitable experiences…The luxury market is getting crazy oversaturated." Shannon Flanagan "Who knows?! It saddens me to see another iconic brand be folded into a like brand. The big question I’m most curious about is the positioning of Neiman Marcus in their portfolio: stores, product, teams, culture, etc." Jeff Sward "This is a far from obvious solution to what ails these two retailers and this tier of the market. Sure, they will save a couple of nickels in some back office efficiencies and a couple more nickels in “negotiating power” (maybe). Neither of those press release favorites will move the needle significantly."