UPDATE 1/11/2024: Neiman Marcus CEO Geoffroy van Raemdonck has firmly squashed any hope of a merger, telling CNBC that he sees “no need” to sell the business and adding that the company is unlikely to change hands in the next five years. “Our shareholders don’t have the need to sell the business because we have a billion of available liquidity,” van Raemdonck told CNBC. “We’re profitable and we’re reporting results that are in a good place and can only be better.”
Original story begins-
Nieman Marcus has rejected Saks Fifth Avenue’s latest takeover bid, according to the Wall Street Journal. This offer had valued Neiman Marcus at $3 billion, but the luxury retailer objected to the deal’s structure because a significant portion of the payout would not have been in cash, people familiar with the matter told WSJ.
This latest round of takeover talks has been underway for months, continuing a saga that began as far back as 2017, when Neiman Marcus put itself up for sale and began merger talks with Saks’ parent Hudson’s Bay Company. That round of negotiations fell through after a few months, and three years later, in 2020, Neiman Marcus filed for bankruptcy. After shedding nearly $4 billion in debt, Neiman undertook a transformation effort that earlier this year led to a revamp of the company’s leadership structure and the elimination of just under 5% of its workforce.
Now the luxury giants are back at the bargaining table and both companies are amenable to a deal, according to WSJ, but finding the right deal appears to again be the sticking point.
Following a spending surge during the pandemic, consumers are now cutting back on luxury purchases, putting both brands under pressure. A merger of the two companies would give Neiman and Saks more clout with luxury suppliers and allow them to cut duplicated costs. Saks currently operates 39 stores, while Neiman has 36 department stores, two Bergdorf Goodman stores and five Last Call discount stores.