Combination expected to fuel growth and benefit customers,brands and employees by meeting the increasing demands of the rapidlyevolving luxury retail industry
● The transaction brings together three iconic luxurydestinations to better serve customers, employees and brand partners,supported by a portfolio of prime retail real estate assets in top-tier luxury locations
● Saks Global will be well positioned to meet customers’increasing demands for a highly personalized, seamless experience with greateropportunities for product discovery across all channels
NEW YORK - July 4, 2024 -HBC, parent company of Saks Fifth Avenue, has entered intoa definitiveagreement to acquire NeimanMarcus Group (“NMG”), parent company of Neiman Marcus and Bergdorf Goodman, for a total enterprisevalue of $2.65 billion. Upon transaction close, HBC will establish Saks Global, a combination ofworld-class luxury retail and real estate assets, including Saks Fifth Avenue,Saks OFF 5TH, Neiman Marcusand Bergdorf Goodman, each of which will continue operations under their respective brands.
“We're thrilled to take thisstep in bringing together these iconic luxury names, Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman,” said Richard Baker,HBC Executive Chairman and CEO.“For years, many in the industry haveanticipated this transaction and the benefits it would drive for customers,partners and employees. Thisis an exciting time in luxury retail, with technological advancements creating new opportunities toredefine the customer experience,and we look forward to unlockingsignificant value for our customers, brand partners and employees.”
Compelling StrategicRationale Benefiting Customers, Brands and Employees
Following the closing of thetransaction, Saks Global will be well positioned to meet luxury consumers’ evolving expectations by:
● Advancing the luxury shoppingexperience.Saks Globalwill invest in the luxury shopping experience, ensuring that customers can seamlessly accessa broad fashion assortment through their channel of choice. Building on each retail brand’shistory of innovation,Saks Global will drive further advancements inonline functionality and fulfillment processes while providing greater accessto merchandise.
● Serving ourcustomers through personalized interactions.High-touch, personalized experiences are fundamental to luxury shopping. Saks Global will bolsterits technology-driven
approach to personalization,leveraging first-party data and AI to create individualized online shopping experiences and empower sales associates tobetter serve customers.
● Supporting established andemerging brands.For over 100 years, Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman have been deeplycommitted to helping luxury consumers discover the latest fashion from established and emergingdesigners. Through its improved ecommerce experience and well-located store fleet, SaksGlobal willhelp emerging and established brands reach their targetcustomers.
● Creating value for employees.Wellpositioned to succeed in the evolving and growing luxury industry, Saks Global will offervalue andcareer development opportunities to employees.
Current Saks.com CEO MarcMetrick will become CEO of Saks Global, leading Saks Global’s retail and consumer businesses and driving the strategyto advance the luxury shopping experience.
“Saks has remained steadfastin our commitment to be at the forefront of luxury fashion, meeting customers not just where they are, but where theyare going,” Mr. Metrick said. “We have respect and admiration for NMGand the contributions its teams have made in the company’s evolution. Together, with our ongoing focus on innovation,we are primed to drive growth for our brand partners and create career development opportunities for theincredible talent across Saks Global.”
Geoffroy van Raemdonck, Chief Executive Officer of Neiman MarcusGroup, said, “This announcement is a testament to our team's unwaveringcommitment to building rewardingcustomer relationships, driven by our differentiated business model. We believethis is a proactive choice in an evolving retail landscape that will createvalue for our customers and brand partners. Saks Fifth Avenue shares ourpassion for connecting customers with the world’s best luxury fashion. With ourcomplementary capabilities and a new long-term capital structure, the combinedgroup will position our iconic Neiman Marcus and Bergdorf Goodman brands forcontinued success.”
Saks Global
Upon closing of thetransaction, Saks Global will comprise the Saks Fifth Avenue, Saks OFF 5TH, Neiman Marcus and Bergdorf Goodman brands, whichwill continue operations under their respective brand names.
Saks Global will also includeHBC’s U.S. real estate assets and Neiman Marcus Group’s real estate assets, creating a$7 billion portfolio of well-located retail real estateassets in top-tier luxury shopping destinations. Ian Putnam, currently President and CEO ofHBC Properties and Investments, will become CEO of Saks Global Properties and Investments, whichwill manage, maximize and enhance the company’s robust portfolio of assets.Both Mr.Metrick and Mr. Putnam will report to Mr. Baker, who will serve as ExecutiveChairman of Saks Global.
HBC’s Canadian Retail andReal Estate Assets
Upon closing of thetransaction, HBC’s Canadian business will be recapitalized as a standaloneentity, separate from Saks Global, withsignificantly reduced leverage and enhanced liquidity. HBC will continueto wholly own its Canadianretail and real estate assets, including Hudson’s Bay, which operates TheBay.com and the Hudson’s Baynetwork of stores, as well as a CAD$2 billion real estate portfolio. As
a result, HBC’s Canadianbusiness will be well positioned to support future growth, while continuing to serve its loyal Canadian customer base.
Transaction Details
The Boards of Directors ofHBC and Neiman Marcus Group have approved the transaction. The transaction is subject to the receipt of requiredregulatory approvals, and other customary closing conditions. Until closing, thecompanies will continue to operate separately.
The purchase price isexpected to be funded by a combination of equity capital from new and existing shareholders and debt facilities. Amazon willbe an investor in and work with Saks Global to innovate on behalf of customersand brands partners following the close of the transaction. Rhône Capital, a transatlantic middle-marketprivate equity firm and affiliated investment entities, will continue asthe active lead investor in Saks Global. Global software investor, InsightPartners, an investor in Saks.com, will be a shareholder in the new company.Salesforce will also become an investor at closing.
HBC has secured a $1.15billion fully committed term loan financing from investment funds and accounts managed by affiliates of Apollo, and a $2 billionfully committed revolving asset based loan facility from Bank of America (leadunderwriter), Citigroup, Morgan Stanley, RBC Capital Markets, and Wells Fargo.
The transaction deleveragesthe combined enterprise while ensuring that Saks Global, on a pro forma basis, will have significant liquidity.
Advisors
M. Klein & Company isserving as the lead financial advisor and capital markets advisor to HBC on the acquisition of Neiman Marcus Group and relatedfinancings. Solomon Partners is also serving as a financial advisor to HBC. ElmStreet Advisors is serving as strategic, commercial and operational advisor.Deloitte is serving as afinancial and tax advisor to HBC.
Willkie Farr & GallagherLLP is serving as legal counsel to HBC.
J.P. Morgan and Lazard areserving as financial advisors to NMG. Sullivan & Cromwell, LLP is servingas legal counsel to NMG.
Berenson & Company served as financial advisor to Insight Partners.
About HBC
HBC is a holding company ofinvestments and businesses at the intersection of technology, retail operations, and real estate.
It is the majority owner oficonic ecommerce companies: Saks, a leading online destination for luxury fashion, and Saks OFF 5TH, a premier luxuryoff-price ecommerce company offering top brands at the best prices. These businesses wereestablished as separate operating companies in 2021. HBC also wholly owns Hudson’s Bay, aleading premium retailer in Canada operating a national network of storesand TheBay.com, as well asSFA, the operator of Saks Fifth Avenue’s physical locations, and O5, theoperating company for SaksOFF 5TH stores.
With assets spanning topmarkets and prime locations across North America, HBC owns or controls—either entirely or with joint venturepartners—approximately 42 million square feet of gross leasable area. HBC Properties andInvestments, the company’s real estate and investments portfolio business, manages these assetsalong with additional real estate offerings, including Streetworks Development, its propertydevelopment division.
Founded in 1670, HBC is NorthAmerica’s longest continuously operating company, with headquarters in New York and Toronto. For more information, visitwww.hbc.com.
About Saks Fifth Avenue
Saks Fifth Avenue is theleading name in luxury shopping. Since 1924, the brand has maintained a reputation for delivering an expertly curatedassortment of fashion and highly personalized service. The Saks Fifth Avenue experienceoffers seamless all-channel shopping through an elevated digital platformand in-person servicesprovided by an extraordinary network of 39 Saks Fifth Avenue stores acrossNorth America.
Shop on Saks.com and the Saksapp, or visit Saks.com to find a Saks Fifth Avenue store location near you. Follow @saks on Instagram, TikTok and Facebook,@thesaksman on Instagram and @Saks Fifth Avenue on LinkedIn.
About Neiman Marcus Group
NMG is the parent company ofleading U.S. multi-brand luxury retailers Neiman Marcus and Bergdorf Goodman. The company successfully transformed itselfinto a profitable luxury relationship business by Revolutionizing Luxury Experiencesfor customers, brand partners, communities, and associates. Its differentiated business model isanchored around integrated retail, an expertly curated product assortment, and a sales-assistedapproach. The company’s culture of Belonging, powered by its 10,000+ associates, celebrates theindividual talents that form its collective strength. NMG WOW, its unique andflexible integrated workingphilosophy empowers associates to do their best work. For more informationabout NMG, visitneimanmarcusgroup.com or follow the company on LinkedIn, Instagram, andYouTube.
CONTACTS
For HBC and Saks
sakspress@saks.com
For Neiman Marcus Group
pr@neimanmarcus.com
For Rhône Capital
Brunswick Group
RHONE@brunswickgroup.com
