Saks Fifth Avenue’s latest $3 billion bid to purchase Neiman Marcus was rejected this week, people conversant in the proposed marriage of the 2 luxury retail archrivals revealed.
Neiman is reportedly open to a cope with Saks — which has tried thrice to amass its smaller but formidable competitor — however the two can’t appear to agree on the terms of a once-unthinkable merger, sources told The Wall Street Journal.
Saks’ offer valued Neiman — which owns Bergdorf Goodman in Latest York on top of its namesake high-end chain — at roughly $3 billion. Per Saks’ deal structure, a good portion of that sum wasn’t in money, which Dallas-based Neiman wasn’t pleased about, in keeping with The Journal.
The sum would mark a multibillion-dollar loss for Neiman, which in 2005 fetched $5.1 billion in the primary of a series of debt-fueled buyouts that ended up crippling the corporate.
This week’s rejection, nonetheless, is just the newest in Saks and Neiman’s on-again off-again talks a few merger, which date back greater than a decade and have largely fallen apart over disagreements over the worth tag, sources told The Post earlier this yr.
Saks Fifth Avenue reportedly made its third attempt at acquiring Neiman Marcus this week in a deal that will value its smaller luxury rival at $3 billion. The offer was rejected, in keeping with The Wall Street Journal. dpa/picture alliance via Getty Images
The Journal reported that each retailers will proceed to mull a deal, though one likely won’t be reached before 2024.
The merger of Saks, which currently operates 41 stores, with Neiman’s 36 stores would almost actually face antitrust scrutiny. Insiders say the businesses would likely argue that their dominance in luxury has sharply eroded over the past decade with the rise of the web.
As The Post exclusively reported in June, Neiman’s current private equity owners have squabbled over a possible exit. Neiman’s two minority investors — Davidson Kempner Capital Management and Sixth Street Partners — have been pushing for a direct sale.
However the 116-year-old company’s majority investor — Pacific Investment Management Co., higher referred to as PIMCO — had been willing to carry on longer, arguing that the business will improve, sources confirmed on the time.
By August, Neiman’s persistently disappointing results appeared to have finally swayed PIMCO to weigh a possible sale to 156-year-old Saks’ Toronto-based owner, Hudson’s Bay, which executed exclusive due diligence to judge Neiman’s business, sources with knowledge of the negotiations told The Post this summer.
Neiman — which owns Bergdorf Goodman in Latest York on top of its namesake high-end chain — operates 36 stores. Saks, meanwhile, boasts 41 stores. Jeffrey Greenberg/UCG/Universal Images Group via Getty Images
Hudson’s Bay likely took Neiman’s inability to shoulder losses from the coronavirus pandemic under consideration. The chain declared bankruptcy in May 2020, blaming the pandemic for spoiling its turnaround and forcing it right into a restructuring.
Neiman said it emerged from its high-profile collapse just 4 months after announcing its Chapter 11 bankruptcy protection process because of a restructuring plan that eliminated greater than $4 billion of debt and $200 million of annual interest expense.
The luxurious department store concurrently announced that it was shaking up its board, and named former LVMH and eBay executives as directors, though CEO Geoffroy van Raemdonck would remain in the highest job.
Neiman drew criticism over keeping van Raemdonck in his cushy position as he was known to take lavish pay packages for himself, whilst the corporate he ran lost money, laid off employees and slashed pensions.
Geoffroy van Raemdonck has been Neiman’s CEO since 2018, and saw the retailer emerge from a Chapter 11 bankruptcy in 2020. He has been under fire for his multimillion-dollar annual pay packages despite the corporate’s struggles. Getty Images
In 2020 — the yr of Neiman’s bankruptcy — he walked away with a $1.5 million yearly salary, not to say greater than $2 million in stock options and a payment of $172,135 to offset taxes.
Including his $4 million bonus, van Raemdonck reportedly walked away with a pay package that topped $6 million in 2020.
Within the yr leading as much as Neiman’s bankruptcy filing, van Raemdonck received three pay raises that saw his annual salary jump from $1 million to $1.2 million and eventually to $1.5 million by early March 2019. Together with each bi-weekly paycheck, the chief also received a $19,230 bonus check, in keeping with court documents.
Representatives for Saks Fifth Avenue at Hudson’s Bay and for Neiman Marcus declined to comment.