New Saks-Neiman Marcus leader says $2.65 billion deal ‘is about growing,’ not shrinking
Marc Metrick, the executive poised to lead Neiman Marcus after its sale to rival Saks Fifth Avenue, says there are no plans to shrink either of the luxury department store chains after the $2.65 billion deal is completed.
Metrick, CEO of Saks.com, and his parent company rocked the upscale retail world Thursday when it announced the deal for Saks Fifth Avenue to buy longtime competitor Neiman Marcus, based in Dallas, and combine two of the world’s fashion leaders.
Saks’ parent company HBC will be the new owner of both retailers, and online retail giant Amazon was enlisted as an equity investor.
“The underlying premise and the strategy is about growing,” Metrick said in an interview with The Dallas Morning News on Friday. “That might not be the number of stores, but you certainly don’t grow by contracting stores that are in good markets. When you think about the markets where Saks and Neiman’s overlap, those are going to be pretty good markets.
“It’s not about shrinking,” he said.
Metrick spoke exclusively to The News less than 24 hours after HBC, the holding company for Saks, made the deal public.
Testament to Neiman Marcus’ culture
“You’re sitting in Dallas right now, and how many Saks Fifth Avenues are in that market?” Metrick said. “It’s a testament to the culture at Neiman Marcus that we could not pierce that market. There’s so much loyalty, and there’s so many dedicated folks and they love their Neiman’s there. It’s very exciting to be able to go in and to really think about how can you expand on that, how can you build on that?”
For more than 115 years, Neiman Marcus has been operating from downtown Dallas, where Herbert Marcus Sr., his sister, Carrie Marcus Neiman, and her husband, A.L. Neiman, opened their upscale store in 1907. It’s gone through a series of owners since it was first sold in 1969 as well as through bankruptcy in 2020 — emerging later that year with a new financial plan.
Neiman Marcus has 36 brick-and-mortar stores, two Bergdorf Goodman stores in Manhattan and five discount Neiman Marcus Last Call stores. That includes five Neiman Marcus stores in the Dallas-Fort Worth market. The company has about 10,000 employees nationwide.
Luxury retail rival Saks Fifth Avenue, which was started in New York City, has 30 stores nationwide for its flagship department store brand and 100 of its Saks Off 5th discount brand.
The combined entity will control about $7 billion of real estate in some of the country’s most coveted high-end retail destinations.
A deal for Neiman Marcus to be sold to Saks has been discussed frequently for more than a year, although Metrick said the timing and details just never worked out.
“It’s like any, any relationship that is really destined,” Metrick said. “Sometimes it just takes the right timing. It takes the right state of mind, and it takes the right sort of situation, and I think all those things were there, whereas in the past, maybe one of the two parties was in a different frame of mind or the world wasn’t ready for it or it wasn’t as necessary as it is today.”
Plans for the Dallas headquarters, Neiman’s administrative staff and CEO Geoffroy van Raemdonck have not been decided yet, Metrick said, and the acquisition still needs to clear a review from the Federal Trade Commission and other regulatory hurdles before those discussions can begin in earnest.
“There’s nothing definitive, and we haven’t really talked about it together,” Metrick said.
“We’ve got a while to go here before we close, and it would be premature, and both of us need to be running our businesses right now.”
Discussions with federal regulators have not started yet, he said.
Van Raemdonck did not immediately respond to requests for comment. In a statement Thursday, he said, “This announcement is a testament to our team’s unwavering commitment to building rewarding customer relationships, driven by our differentiated business model. We believe this is a proactive choice in an evolving retail landscape that will create value for our customers and brand partners. Saks Fifth Avenue shares our passion for connecting customers with the world’s best luxury fashion. With our complementary capabilities and a new long-term capital structure, the combined group will position our iconic Neiman Marcus and Bergdorf Goodman brands for continued success.”
Economic cycles and evolutions
In a world where executives move between corporate competitors regularly and between industries, Metrick is a rare leader who has spent almost three decades with Saks, with only a three-year stretch at sister department store chain Hudson’s Bay Company before coming back as Saks’ president in 2015.
That means Metrick has seen economic cycles and evolutions in retailing and the luxury sector. Brands such as Louis Vuitton, Gucci and Hermès were once only available through high-end department stores such as Saks and Neiman Marcus.
But now those brands have gone directly to consumers with branded stores at key shopping centers such as Highland Park Village and NorthPark Center. There is also a growing online space for luxury sales, directly through brands and through internet marketplaces.
“The consumer is evolving and moving so fast, and it’s becoming more and more important to make sure that you meet the consumer where they’re going versus where they’re standing today,” he said. “And to do that, you’ve got to invest in the right things. You’ve got to be well-capitalized and have the right focus. And it really is time for two companies like ours to come together to service the customer in the best possible way.”
Beyond combined sourcing, distribution and administrative functions, the biggest opportunities Metrick sees in the days ahead will be learning about customers who shop at one store or the other or even both. Saks and Neiman will be able to exchange data and compare inventory to find out more quickly what well-heeled shoppers want.
Exactly how Seattle-based Amazon will play into the combined company is still in discussions, but Metrick said he wants the web conglomerate to be more than just an investor.
“We want a strategic partner,” he said. “They are probably the world’s foremost customer-obsessed company. So as we move into this new way of doing things, as we try to build this business together to enhance the customer experience, there is no better partner to have to help us future-proof.”
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