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 luxury department store chain after the $2.65 billion deal is completed.
Metrick, the CEO of Saks.com, and its parent company shocked the luxury retail world on Thursday when they announced the deal for Saks Fifth Avenue to buy longtime competitor Neiman Marcus, based in Dallas, and combine two of the leaders of fashion in the world.
Saks’ parent company HBC will be the new owner of both retailers, and online retail giant Amazon signed up as an equity investor.
“The basic premise and strategy is about growth,” Metrick said in an interview with Dallas Morning News Friday. “It may not be this number of stores, but you certainly don’t grow by outsourcing stores that are in good markets. When you think about the markets where Saks and Neiman overlap, they’re going to be pretty good markets.
“It’s not about shrinking,” he said.
Metrick spoke exclusively with news less than 24 hours after HBC, the holding company for Saks, made the deal public.
Testament to the culture of Neiman Marcus
“You’re sitting in Dallas right now, and how many Saks Fifth Avenues are in that market?” said the Metric. “It’s a testament to the culture at Neiman Marcus that we couldn’t crack that market. There is so much loyalty, and there are so many dedicated people, and they love their Neiman’s there. It’s very exciting to be able to go in and really think about how you can expand it, how you can build on it?”
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, AL Neiman, opened their luxury store in 1907. It has gone through a series of owners since it was first sold in 1969 and 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 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.
Luxury retail rival Saks Fifth Avenue, which started in New York City, has 30 stores nationwide for its flagship department store brand and 100 of its 5th discount brand Saks Off.
The combined entity will control approximately $7 billion in real estate in some of the nation’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, though Metrick said the timing and details just never worked out.
“It’s like any, any relationship that’s really meant to be,” Metrick said. “Sometimes it just takes the right time. It takes the right state of mind, and it takes the right kind 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 yet been decided, Metrick said, and the acquisition must still clear a Federal Trade Commission review and other regulatory hurdles before those discussions can begin in earnest.
“There’s nothing final, and we haven’t talked about it together,” Metrick said.
“We have a little time to go here before we close, and it would be premature and we both have to run our businesses now.”
Discussions with federal regulators have not yet begun, he said.
Van Raemdonck did not immediately respond to requests for comment. In a statement on 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 nearly three decades with Saks, with only a three-year stretch at sister department store chain Hudson’s Bay Company before returning as president of Sax. in 2015.
This means that Metrick has seen economic cycles and evolutions in the retail and luxury sector. Brands like Louis Vuitton, Gucci and Hermès were once only available through high-end department stores like Saks and Neiman Marcus.
But now these brands have gone direct to consumers with brand name stores in major malls like Highland Park Village and NorthPark Center. There is also a growing online space for luxury sales, directly through brands and through online marketplaces.
“The consumer is evolving and moving so fast, and it’s becoming more and more important to make sure you’re meeting the consumer where they’re going versus where they are today,” he said. “And to do that, you have to invest in the right things. You need to be well capitalized and have the right focus. And it really is time for two companies like ours to come together to serve the customer in the best possible way.”
Beyond the combined sourcing, distribution and administrative functions, the biggest opportunities Metrick sees in the coming days will be learning about customers who shop at one store or the other or both. Saks and Neiman will be able to share data and compare inventory to more quickly discover what well-heeled shoppers want.
Exactly how Seattle-based Amazon will play into the combined company is still under discussion, but Metrick said he wants the Internet conglomerate to be more than just an investor.
“We want a strategic partner,” he said. “They are probably the biggest customer-obsessed company in the world. So as we transition to this new way of doing things, as we try to build this business together to improve the customer experience, there is no better partner to help us future-proof.”
