Saks buys Neiman Marcus

There have been rumblings about this for months. It was bound to happen as the retail landscape was due for massive upheaval.

There are 75 stores between Saks and Neimans; it will be interesting to see what they look like in a year. At this point, Nordstrom, Macy, and Saks Global have prevailed in the land of department stores, as in the last stores standing, and Nordstrom is attempting to take the company private. It is unclear where Authentic Brands’ purchase of Barneys plays out in all of this, as they have a licensing agreement with Saks. Keep in mind that Saks also owns Bergdorf Goodman. Hudson Bay, a Canadian company that owns Saks, is behind all this. It’s fitting, considering Campeau changed retail in 1986 when they purchased Allied and eventually Federated. That changed the retail landscape.

Other mergers are taking place in food retail, like the merger of Krogers and Albertsons, although there have been multiple filings from the FTC to stop it. I understand the fear of the government when it comes to multi-billion dollar mergers that will block competition. Still, Saks, Neimans, Krogers, and Albertsons can’t continue operating as they have been for years. The net numbers don’t work. They need to merge.

What is most fascinating about the entire Saks transaction is that Amazon and Salesforce are taking a stake in it. These companies started in the 90s and are now part of an industry that has been riding a rocky storm for years. What does Amazon want to do here? Is Salesforce going along because they have so much cash to put to work?

Marc Metrick, who started his career at Saks, will be the CEO of this entire operation. What will these stores and the consumer experience look like? Throughout all of this, the heavy hand of private equity has been present in all these transactions.

Perhaps we will see fewer massive department stores and more local shops that are curated for consumers and the community. Maybe the government will not allow these transactions to take place. On the other side of the Atlantic, we see LVMH buy L’Ami Louis, a 100-year-old Parisian gem, and Tiffanys. They are also joining forces with Accor to operate and update the Orient Express, including building new ships, hotels, and stores throughout the globe. I am fascinated with Bernard Arnault and his vision of LVMH.

It’s unclear where all of this will end up, but one thing is for sure: Retail, hotels, travel, and all that hospitality touches are up for massive change in the years to come. They have all been bleeding for years with little innovation except mergers. The time has come.