AN iconic department store chain is eyeing a $1 billion shake-up to ease some of its financial troubles, planning to sell nearly half of one of its ultra-luxury brands.
Saks Global, the parent of Saks Fifth Avenue, is currently working out the details of the landmark deal, with a big decision expected in the coming months.
Saks Global, a North American luxury holding company, is the parent company of Saks Fifth Avenue[/caption]
Saks Global is working to sell 49% of Bergdorf Goodman, a luxury American department store, for roughly $1 billion, people familiar with the matter told The Wall Street Journal.
At least four potential bidders are eyeing the purchase, including Middle Eastern sovereign wealth funds and strategic investors, the sources told the outlet.
A strategic deal may go through as soon as early 2026.
The company, which currently owns properties valued at around $9 billion, is also looking to sell $600 million of real estate, the report added.
“We have initiated a strategic process to explore the potential sale of a minority stake in Bergdorf Goodman,” said Richard Baker, executive chairman of Saks Global.
“While Bergdorf Goodman is core to our strategy, this process is intended to unlock value for our stakeholders and de-lever our business.”
Saks Global was formed last July by Hudson’s Bay Company, the oldest retailer in North America, after it acquired the Neiman Marcus Group for $2.65 billion.
The deal combined Saks Fifth Avenue, Neiman Marcus, Bergdorf Goodman, and as well as other luxury retail and real estate assets.
Prior to the Neiman Marcus Group’s acquisition, it had received an offer from a sovereign wealth fund to purchase the entirety of Bergdorf Goodman for $1.5 billion, according to the report.
The total value of Bergdorf Goodman currently stands at between $1.5 billion and $2.5 billion.
The cash earned from selling a chunk of Bergdorf Goodman would help Saks Global pay down debt from its acquisition of the Neiman Marcus Group, per WSJ.
The merger of Saks Global and the Neiman Marcus group has been confronted with struggles, including slow sales in the luxury goods market.
The combined companies are expected to save over $600 million by combining back-office operations like information technology and reducing overlapping staff.
SNAZZY SHOPPING
Bergdorf Goodman is an iconic ultra-luxury department store, known for its unparalleled selection of high-end fashion, accessories, beauty products, and home goods from designers like Chanel and Hermès.
What is Saks Global?
Saks Global is the luxury retail and real estate group formed after Hudson’s Bay Company’s acquired the Neiman Marcus Group.
It is the largest multi-brand luxury retailer globally, encompassing:
- Saks Fifth Avenue
- Neiman Marcus
- Bergdorf Goodman
- Neiman Marcus Last Call
- Saks OFF 5TH
- Horchow
The brand is also known for its superior product curation and customer service, as well as its iconic location on New York City’s Fifth Avenue on the site of the former mansion of American socialite Cornelius Vanderbilt II.
Should a bidder purchase part of Bergdorf Goodman, they would receive a stake in the operating company, not its prized real estate, owned by the founding Goodman family.
The luxury department store’s roots trace back to 1899 when Alsatian immigrant Herman Bergdorf opened a tailor’s shop near Union Square.
Edwin Goodman apprenticed with Bergdorf and the two eventually became partners.
Bergdorf Goodman has largely avoided the fate of other department stores like Macy’s, JCPenney, and Kohl’s, which hurt their unique appeal by expanding into the suburbs.
The ultra-luxury brand still operates just two locations right across the street from one another, with one devoted to women and the other for men.
Saks Global is looking to sell 49% of Bergdorf Goodman for $1 billion[/caption]
Saks Global’s $1 billion deal is expected to go through early next year[/caption]
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