Saks-Neiman Marcus’ new CEO says $2.65 billion deal is ‘about growth,’ not shrinking

Marc Metrick, the executive expected to lead Neiman Marcus after its sale to rival Saks Fifth Avenue, said there are no plans to cut staff at either luxury department store chain once the $2.65 billion deal is finalized.

Metrick, CEO of Saks.com, and his parent company shook up the high-end retail world Thursday by announcing a deal for Saks Fifth Avenue to buy longtime rival Dallas-based Neiman Marcus, combining two of the world’s leading fashion companies.

Saks parent company HBC will be the new owner of both retailers, and online retail giant Amazon has been brought on board as an equity investor.

“The underlying principle and strategy is growth-oriented,” Metrick said in an interview with The Dallas Morning News Friday. “It may not be the number of stores, but you certainly can’t grow by reducing the number of stores that are in good markets. When you think about the markets where Saks and Neiman’s overlap, those are very good markets.”

“It’s not about shrinking,” he said.

Metrick spoke exclusively with The news less than 24 hours after HBC, Saks’ holding company, made the deal public.

A testament to Neiman Marcus’ culture

“You’re in Dallas right now, and how many Saks Fifth Avenues are there in that market?” Metrick said. “The fact that we haven’t been able to crack that market is a testament to the culture of Neiman Marcus. There’s so much loyalty, so many dedicated people, and they love their Neiman there. It’s very exciting to be able to go in there and really think about how we can grow that, how we can build on that.”

For more than 115 years, Neiman Marcus has operated out of downtown Dallas, where Herbert Marcus Sr., his sister, Carrie Marcus Neiman, and her husband, A.L. Neiman, opened their upscale store in 1907. It has gone through a series of owners since its first sale in 1969 as well as 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 Neiman Marcus Last Call discount stores. This includes five Neiman Marcus stores in the Dallas-Fort Worth market. The company has approximately 10,000 employees nationwide.

Its luxury retail rival, Saks Fifth Avenue, which launched in New York, has 30 stores nationwide for its flagship department store brand and 100 of its discount brand Saks Off 5th.

The combined entity will control approximately $7 billion of real estate in some of the country’s most coveted high-end retail destinations.

A deal to sell Neiman Marcus to Saks has been discussed frequently for more than a year, though Metrick said the timing and details never worked out.

“It’s like any relationship that’s doomed,” Metrick said. “Sometimes it’s just finding the right timing. It’s the right mindset and the right situation. I think all of those elements were there, whereas in the past, maybe one party was in a different mindset 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 yet been decided, Metrick said, and the acquisition must still pass a Federal Trade Commission review 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 still have some time before we close, and that would be premature, and we both need to run our businesses now.”

Talks with federal regulators have not yet begun, 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 best in luxury fashion in the world. 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 developments

In a world where executives regularly move from company to company and industry to industry, Metrick is a rare executive who spent nearly three decades at Saks, with just three years at sister department store chain Hudson’s Bay Company before returning as Saks’ president in 2015.

Metrick has been able to observe economic cycles and changes in the retail and luxury sector. Brands such as Louis Vuitton, Gucci and Hermès were once only available in high-end department stores such as Saks and Neiman Marcus.

But today, these brands are going direct to consumer, with branded boutiques in key malls such as Highland Park Village and NorthPark Center. There is also a growing online retail space for luxury goods, both directly through brands and through online marketplaces.

“The consumer is changing and moving very quickly, and it’s becoming increasingly important to make sure that we’re meeting the needs of the consumer where they are, rather than where they are today,” he said. “And to do that, you have to invest in the right areas. You have to be well capitalized and have the right focus. It’s really time for two companies like ours to come together to serve the customer in the best possible way.”

Beyond the combined functions of sourcing, distribution and administration, the biggest opportunities Metrick sees in the days ahead will be to better understand the 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 more quickly discover what affluent shoppers want.

Exactly how Seattle-based Amazon will play into the combined company is still being discussed, but Metrick said he wants the web conglomerate to be more than just an investor.

“We’re looking for a strategic partner,” he said. “This is probably the most customer-centric company in the world. As we move to this new way of doing things, as we try to build this business together to improve the customer experience, there’s no better partner to help us secure the future.”