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Neiman Marcus reportedly turns down $3 billion offer from Saks

Neiman Marcus
Neiman Marcus reportedly turns down $3 billion offer from Saks.

A long-proposed merger between two luxury retailers has reportedly hit a snag.

 Neiman Marcus Group has rejected a $3 billion purchase offer from Saks Fifth Avenue, according to the New York Post, covering a report originally appearing in the Wall Street Journal. A significant portion of the $3 billion bid was non-cash, which contributed to the owner of the Neiman Marcus and Bergdorf Goodman upscale department store brands declining the proposal, according to the report.

However, the two companies will reportedly continue negotiating a merger deal, which would most likely come to fruition in 2024, with the combination of the two leading luxury retail brands probably attracting antitrust scrutiny from the federal government. 

In February 2023, Neiman Marcus Group realigned part of its leadership structure and laid off roughly 500 employees, or about 5% of its workforce. Amid the layoffs, the company said it had also identified open roles “to best support our operating model going forward” which will be filled based on strategic business needs.

The layoffs came about two months after Neiman Marcus Group added two new executives to its C-suite. At the time, Neiman Marcus Group said its new operating model will drive “fast decision-making and agility to accelerate the company's competitive advantage through its differentiated business model.”

As part of the new model, the retailer gave additional group-level responsibilities for strategic capabilities to each of its brand presidents. In 2021, Neiman Marcus underwent refinancing to eliminate $4.4 billion of the approximate $5 billion the company owed in debt at the time, and about $200 million in annual interest payments. 

This followed Neiman Marcus’s emergence from Chapter 11 bankruptcy in September 2020 with new owners including majority investor PIMCO and minority investors Davidson Kempner Capital Management and Sixth Street.

According to the New York Post. Davidson Kempner Capital Management and Sixth Street Partners have been proponents of selling to Saks since June 2023, but PIMCO is in favor of waiting to sell in anticipation of improving results. 

Representatives for Saks Fifth Avenue parent Hudson’s Bay and Neiman Marcus declined a New York Post request for comment. Read more New York Post coverage here.

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