JACKIE MACIA—On December 23, 2024, Hudson’s Bay Company (HBC), the parent company of Saks Fifth Avenue, announced the completion of its $2.7 billion acquisition of Neiman Marcus Group, the parent company of both Neiman Marcus and Bergdorf Goodman. The newly formed Saks Global unites Saks Fifth Avenue, Saks OFF 5TH, Neiman Marcus, and Bergdorf Goodman under one corporate umbrella. The merger created a major shift in the luxury retail market, raising questions about competition, market power, and the strategies that will define the future of the industry.
Before the merger was completed, there were some concerns about successfully getting past the Federal Trade Commission (FTC). Many believed the FTC would closely examine the deal, especially because of the increased focus on corporate mergers in the retail and fashion industries, as seen in the scrutiny of the proposed Tapestry-Capri merger. In that case, the FTC argued that Tapestry Inc.’s acquisition of Capri Holdings would reduce competition in the “accessible luxury” market, demonstrating the agency’s willingness to define market sectors very narrowly.
Antitrust experts speculated that the FTC might have applied a similar approach in the Saks Global-Neiman Marcus Group merger, given that this transaction involved two dominant players in the luxury department store sector. Further, Amazon—a frequent target of regulatory concerns—was a financial backer and technology partner in the deal. Some experts said that regulators were likely to issue a “second request” for more information, a common step in extended investigations. However, the deal ultimately went through without this request. Despite this outcome, Saks Global must stay vigilant regarding potential antitrust challenges. Under the Clayton Act, regulators have the authority to revisit mergers if they later appear to have anticompetitive effects. The company’s increased market share and Amazon’s involvement make it more likely that regulators will continue monitoring its practices.
On the business side of the merger, there have been immediate challenges. Saks has struggled with vendor payment delays for over a year, causing some suppliers to pause shipments and others to file lawsuits. In response, Saks Global’s CEO, Marc Metrick, released a memo on February 14, 2025, that assured vendors that overdue payments would be settled in twelve installments starting in July 2025, and new orders would be paid within ninety days. However, this payment plan may bring concerns among Neiman Marcus’s suppliers, who might face similar delays under the new corporate structure.
Another challenge is the overlap between the two brands. Saks and Neiman Marcus cater to similar customers, offer many of the same products, and often have physical stores in close proximity. Industry experts predict that Saks will reposition itself to appeal to a younger, more accessible luxury market, while Neiman Marcus will maintain its focus on high-end luxury. This differentiation is important to avoid brand confusion and ensure both retailers can succeed under the Saks Global umbrella. Furthermore, with Saks Global’s increased market power, vendors may also face changes. Brands that previously sold to both Saks and Neiman Marcus may now find themselves negotiating with a single, larger entity. This consolidation could lead to demands for lower wholesale prices and longer payment terms, particularly for smaller brands. In response, some may turn to strategies like shop-in-shops or direct-to-consumer models.
The company also faces important decisions regarding its physical stores. Saks Global now operates 38 Saks Fifth Avenue stores, 95 Saks OFF 5TH outlets, 36 Neiman Marcus stores, five Neiman Marcus Last Call stores, and two Bergdorf Goodman stores. Many of these locations are in the same malls or just a short drive apart. To cut costs and improve efficiency, industry experts predict that some stores may close or consolidate, and that online infrastructure will expand to meet consumer preferences. The fashion industry has already seen many brick-and-mortar closures due to inflation and a shift toward e-commerce. Despite these potential challenges, if Saks Global follows through with its plans to modernize operations and maintain strong relationships with vendors, it may succeed in revitalizing the modern luxury market.
