North America’s oldest company isn't too old to learn some new tricks.
What happened: Hudson’s Bay Co. (HBC) is buying U.S. luxury department store Neiman Marcus for ~$3.6 billion. The deal will bring together two of the largest luxury retailers in North America under a new banner, dubbed Saks Global, with a combined 75 stores and 100 outlets.
- Joining forces will cut a lot of duplicate costs between the companies and give the retail giant more power to negotiate better deals with suppliers.
- Amazon and Salesforce will hold minority stakes in the company, which some analysts see as a sign that new tech will be a part of the effort to revive sales.
Catch-up: The luxury market is in a rut after a brief post-pandemic boom. Even international luxury conglomerates like LVMH are struggling to acquire new customers and convince existing ones to splurge. That decline is hitting department stores, like the Bay, even harder.
- Neiman Marcus was forced to file for bankruptcy protection in 2020, while the Bay has closed a number of locations in recent years.
Why it matters: The deal is a vote of confidence in the future of brick-and-mortar luxury shopping at a time when e-commerce has become a focus for many retailers.—LA