In what has been a long-winded back-and-forth that has spanned multiple years, it is now believed that department store powerhouses Saks Fifth Avenue and Neiman Marcus Group are finally set to merge.

According to multiple media reports, Saks parent company Hudson’s Bay Co. (HBC) has secured an agreement to purchase Neiman Marcus Group for a value of 2.65 billion dollars.

It is further understood that marketplace giant Amazon is among the investors for the deal, alongside private equity firm Apollo and software company Salesforce.

Richard Baker, the executive chairman and chief executive officer of Hudson’s Bay, confirmed the news to WWD, to which he said: “I’m very excited. We’ve worked on this for over a decade.

“We’ve had many discussions to buy Neiman’s at much larger numbers. It was too expensive before. It didn’t make sense. The pandemic happened. Neiman’s went bankrupt, but we finally got to a point where we were able to come to terms and do what we think is the right thing for everyone.”

Newly established Saks Global division to oversee luxury real estate

Through the transaction, HBC is planning to establish ‘Saks Global’, which will combine a portfolio of luxury retail and real estate sites, including Saks Off 5th and Neiman-owned Bergdorf Goodman.

The seven billion dollar division will be headed by Saks’ current CEO, Marc Metrick, WWD reported, while president and CEO of HBC Properties and Investments, Ian Putnam, is to become CEO of Saks Global Properties.

It is currently unclear what the future of Neiman Marcus Group CEO Geoffroy van Raemdonck is to be.

HBC’s Canadian business, which includes Hudson’s Bay department stores, among other properties, is to be recapitalised and stay separate from Saks Global.

The deal is anticipated to be funded by a mix of both equity capital from new and existing shareholders and Debt.

According to various media outlets, one of these investors, Amazon, is to work hand-in-hand with the newly formed Saks Global to “innovate on behalf of customers and brand partners”.

HBC has also confirmed the closing of a 1.15 billion dollar committed term loan financing from investment funds and accounts overseen by associates of Apollo, as well as a two billion dollar revolving asset based loan facility from a number of banks, including Bank of America.

Update July 5, 10:45 am: HBC has officially confirmed its acquisition of the Neiman Marcus Group in a press release.