HUDSON’S BAY WATCH
Canadian retailer reportedly in talks to buy U.S. luxury chain Neiman Marcus,
Neiman Marcus is in talks to sell itself to Canadian retail giant Hudson’s Bay Co., according to a person briefed on the discussions. A deal would put the struggling high-end retailer Neiman Marcus under the same umbrella as its luxury rivals Saks Fifth Avenue and Lord & Taylor.
Hudson’s Bay had also been discussing a potential merger with Macy’s. Discussions with Neiman Marcus, however, appear to be a bit more serious, the person said.
In a statement, Hudson’s Bay said it did not discuss “market rumours.” But it added: “Generally speaking, as we have previously stated, we selectively evaluate opportunities to accelerate the company’s strategic growth while maintaining or enhancing its credit profile.”
News of the potential acquisition was reported earlier by the Wall Street Journal.
As part of its most recent financial disclosure, Neiman Marcus said on Tuesday that it was evaluating its strategic options.
Burdened by about $5 billion (U.S.) in debt and slumping sales, the retailer said that a potential sale was among the avenues being explored.
The company said it had not set a timetable to evaluate all of its options. The company’s announcement came as the retailer, which also operates Bergdorf Goodman, reported a loss in its second fiscal quarter that ended Jan. 28 and its sixth consecutive quarterly drop for a key revenue measure.
Neiman Marcus didn’t specify which retailers it was looking at and didn’t immediately respond when asked for comment. The chain is known for its lavish holiday catalogue.
The disclosure of the Hudson’s Bay talks highlights wider troubles at department stores, which have struggled to adjust as quickly as the rest of the retail industry to the new ways that people shop — increasingly online and away from brick-and-mortar stores. Neiman Marcus, Macy’s and others have been unable to keep apace with Amazon, which has conditioned shoppers to expect low-cost goods delivered quickly.
Like many department stores, Neiman Marcus has been wrestling with declining customer traffic and sluggish sales. Even in the world of luxury, affluent shoppers are dramatically changing their habits and are buying designer bags and clothes online on places such as eBay or consignment shops. Neiman Marcus abandoned its plans for an initial public offering in January. The private equity firms Ares Management LP and the Canada Pension Plan Investment Board purchased Neiman Marcus in 2013. At the time, the company had largely stopped expanding into new markets, and was focused on growing its e-commerce business. The company operates 42 stores in the United States and two Bergdorf Goodman locations in Manhattan, according to its website.