HBC aims to close the acquisition of Neiman Marcus Group, promising improved vendor relations and stronger financial positioning.
HBC, the parent company of Saks, announced its intention to complete the $2.65 billion purchase of Neiman Marcus Group by the end of its fiscal year, a move that is expected to significantly improve vendor payments and strengthen the company’s position in the luxury retail market. This announcement was made during a rare conference call featuring key executives Richard Baker, Marc Metrick, and Jennifer Bewley, who also issued an apology to vendors for delays in payments and promised better communication moving forward.
HBC, which includes Saks Fifth Avenue and Saks Off 5th in its portfolio, is set to expand its luxury assets with the addition of Neiman Marcus and Bergdorf Goodman properties once the deal closes. Despite recent payment delays attributed to underperformance in Hudson’s Bay’s Canadian operations, the company assured vendors that the acquisition would have a positive impact on operations.
On Tuesday, HBC cleared a major regulatory hurdle as the Federal Trade Commission’s review period expired without objections, paving the way for the deal’s completion. The company is also working on selling non-core assets to improve cash flow, with its real estate holdings in North America valued at over $6 billion.
Metrick stated that the transaction is on track to close by January, backed by new financing arrangements including a term loan and revolving credit line, projecting immediate cash flow improvements for the larger combined company. Bewley thanked vendors for their patience, acknowledging the difficulties they faced but emphasizing that the acquisition would restore normal operations.
HBC is also backed by high-profile investors including Amazon, Apollo, and Salesforce. The company expressed optimism that the deal would strengthen its financial standing and position it to better meet customer expectations, with plans for future growth in the luxury market.