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The formation of Saks Global in July 2024 was positioned as a landmark moment in luxury retail, a merger meant to give Saks and Neiman Marcus dominance in a shrinking department store business. Backed by tech allies Amazon and Salesforce, and reinforced by a partnership with Authentic Brands Group, the deals promised operational synergies, expanded customer and brand reach, and digital acceleration. So much has happened since then, and behind the headlines lies a more fragile reality. What was touted as a strategic move may, in fact, be a high-stakes gamble with a limited margin for error.

At the time of the merger, the IADS took stock of the freshly minted Saks Global company. A year or so later seemed to be the right time to pause and reflect on Saks Fifth Avenue’s history, a history marked by mergers from its inception in 1867 to its struggles in 2025.

A store is born: The foundations of Saks  

Innovation, family legacy, and the first major merger that shaped Saks 

In 1867, at the age of 20, Andrew Saks and his brother opened a men's clothing store in Washington, D.C. Early on, the small company implemented what would be recognised as department store innovations, such as banning bargaining, merchandise returns, and product catalogues. By 1897, Saks & Company had six stores, including one in Washington and two in New York City. In 1902, while Andrew’s sons, Horace and William, had joined the family business, they secured a long-term store lease at New York’s Herald Square. When Andrew died in 1912, Horace took over management of the company.

In 1923, Saks & Company merged with department store company Gimbel Brothers, Inc., which was owned by Horace’s cousin, setting the stage for future expansion. Having their Herald Square store rent doubled, Horace Saks and Bernard Gimbel decided to relocate their business. In September 1924, they opened New York’s iconic store at 611 Fifth Avenue, marking the first time a large retailer had established a presence in what was then primarily a residential district. Adam Gimbel (Bernard’s cousin) took over the leadership from 1926 when Horace Saks died. In 1931, a couture salon opened its doors, Salon Moderne, which soon ranked among New York’s most glamorous retail spaces. Ran by talented Adam’s wife Sophie, the salon sold her in-house designs alongside fashion from Chanel, Vionnet, Schiaparelli and more. By offering the finest quality, as well as an extraordinary programme of customer services, Saks Fifth Avenue soon became the reference for taste and elegance.

During the Great Depression, Saks proved relatively resilient thanks to its luxury positioning and the instalment options offered to customers, then a common practice among department stores. These challenging times also triggered innovation. Adam Gimbel revolutionised retail presentations by implementing creative solutions. New display techniques were introduced, along with cost-cutting practices such as using cardboard and papier-mâché instead of wood, stone and metal.

By 1940, Saks Fifth Avenue had 12 locations: four flagship stores (in New York, Chicago, Los Angeles’ Beverly Hills and Detroit) and seasonal resort stores. During World War II, in response to changing customer needs, Saks opened Navy and Army shops, which later evolved into University shops after the war, catering to the Ivy League communities.

The mall era and corporate hands 

From the 1950s, the shift from downtown shopping to suburban shopping malls gained momentum, opening a new chapter for the department store. Saks Fifth Avenue's first mall location opened in 1954, at The Galleria in Fort Lauderdale (Florida). Twenty new stores opened between 1972 and 1989. While a few of the new suburban stores were still freestanding in suburbs that had a significant downtown shopping district, dozens of new Saks stores opened in malls until the 1990s.

In 1973, Saks & Company was acquired by tobacco conglomerate B.A.T. Industries PLC, forming the Batus company to run US retail operations. Implementing efficiency policies, Batus also financed store modernisations. In 1979, Saks announced that the flagship store would be remodelled, including the installation of the store’s first escalator, marking the first significant renovation in the store's history. Then, a proposal for an adjacent 36-story mixed-use tower was presented by a joint venture of Saks and Swiss Bank Corporation in 1986. Completed in 1990, the store’s selling floor was expanded by nearly 30% through the first nine storeys of the tower, the other floors allocated to offices. Also, under Batus management, Saks launched Saks Off 5th in 1990, an off‑price concept aimed at monetising clearance merchandise without compromising full‑price sales. Finally, as summarised by The New York Times in 1982, “by hiring highly qualified merchants at high salaries and allowing them free rein, Batus has scored a success at Saks Fifth Avenue, where profits have largely improved after a prolonged slide in the late 1960s and early 1970s.” That said, Batus was a mixed success for B.A.T., as Gimbels struggled.

In 1990, affiliates of Bahrain‑based Investcorp S.A. and a group of international investors acquired Saks & Company. In 1994, to intensify its presence on the West Coast, the company acquired four former I. Magnin luxury department stores in Beverly Hills, Carmel, San Diego and Phoenix. In 1996, Saks became a public company as Saks Holdings, Inc. Public equity provided a currency for the 1998 merger with Proffitt's, Inc., a Tennessee‑based department store. The resulting entity, renamed Saks, Inc., briefly oversaw 330 stores under nine flags.

A century turns, and so does Saks: dot com, financial woes and more mergers

In 2000, Saks launched Saks.com and expanded its presence internationally, opening stores in the Middle East and Mexico. In 2008, the global financial crisis struck with force. While retailers were already discounting merchandise, no one thought luxury brands would be included in this frenzy. Saks decided to cut prices on designer clothes by up to 70%. The strategy helped Saks reduce excess stock, but it took three years before the company could resume selling at closer to full price. Management used this issue as an impetus for structural change, including tighter inventory management and the establishment of the invitation-only Fifth Avenue Club, completed with private lounges and concierge services.

In 2013, Hudson's Bay Company (HBC) acquired Saks, Inc. for US$2.9 billion, marking another significant change in ownership and paving the way for synergies between its own banner and Saks. HBC Chairman Richard Baker announced the group would open up to ten Saks stores in Canada and more than twenty Saks Off Fifth outlet stores. In the end, only three full-price stores opened, whose operations were shut down in 2025 when HBC Canada went bankrupt. In 2015, Baker also launched a US$250 million project to reimagine the Fifth Avenue flagship, elevating the luxury experience.

In 2021, HBC separated Saks Fifth Avenue’s e-commerce operations into a standalone company named Saks, in partnership with Insight Partners, bringing $500 million from venture capital. The move splits the 40 physical stores from the online sales channel, aiming to position better Saks.com to compete with digital competitors. However, the move raised questions about the very relevance of such a split. The initial idea was based on a financial reasoning that Saks.com could go public at six times revenue, an idea immediately pushed by activist investor Jana Partners at Macy’s. Whatever the strategy was worth, it overlooked the role physical footprint plays in driving online sales.

In July 2024, HBC disclosed that it would acquire the previously bankrupt Neiman Marcus Group at a US$2.65 billion price tag (including debts) and fold its assets into a newly formed holding called Saks Global. Last episode of the Saks series for now, in October 2024, Authentic Brands Group (ABG) and Saks Global announced they would build a $9 billion luxury ecosystem through their new venture, Authentic Luxury Group (ALG), which is expected to account for approximately 60% of luxury distribution in the US.

Saks Global: Big bet, bigger risks 

What the deal promises in scale, synergy and innovation 

Considered inevitable to some and mainly driven by the need to consolidate market share in the face of the ongoing department store contraction, the Saks-Neiman Marcus landmark deal is one of the most significant mergers in the luxury retail sector in recent years, at a time when the retail industry is at a crossroads, facing changing consumer habits, digital transformation, and economic pressures.

Hence, in 2024, the merger could be seen as a strategic move to strengthen further the companies’ ability to compete against both traditional rivals, such as Bloomingdale’s and Nordstrom, as well as platforms like Net-a-porter, Farfetch and MyTheresa. By combining resources, inventory, and customer data, Saks Global would enhance both its in-store and online offerings, streamline operations by integrating technology platforms and logistics networks, eliminate duplicative roles in commercial, finance, operations, human resources, technology, and transformation teams, and negotiate more favourable terms with vendors. When it comes to real estate, the merger could optimise the store portfolios for better competitiveness and margins, potentially leading to the monetisation of overlapping locations in major cities.

Additionally, the move was expected to position the company to better adapt to the ongoing digital transformation, bringing significant financial resources and technological expertise to the new entity. Amazon and Salesforce’s minority stakes would leverage technology to modernise operations and compete in luxury e-commerce. Central to Saks Global strategy is the rollout of AI-powered personalisation, designed to create highly tailored shopping experiences across both digital and physical channels. Early results showed significant improvements in conversion rates and revenue per visitor, validating the group’s investment in advanced data analytics and machine learning. In August 2025, Saks partnered with AWS to launch Sophie, an AI-powered virtual voice assistant that handles customer inquiries while reducing agent call volume by 20%.

The merger was also said to offer other strategic advantages. Neiman Marcus attracts more affluent customers (median income is $112,800 vs. Saks' $102,900) and has access to more family-oriented shoppers (26.2% vs. 23.7% of households with children).

The merger was also said to offer other strategic advantages. Neiman Marcus attracts more affluent customers (median income is $112,800 vs. Saks' $102,900) and has access to more family-oriented shoppers (26.2% vs. 23.7% of households with children).

The price of consolidation: Why vendors, shoppers and analysts remain unconvinced 

However, the merger raised concerns due to the differences in branding, clientele, and business models between Saks, primarily operating through concessions and moving further away from wholesale, and Neiman Marcus, which is more wholesale-focused. Brand differentiation appeared as a challenge, as the suggestions to reposition Saks as ‘accessible luxury’ and Neiman Marcus as ‘true luxury’ seem risky. Additionally, although a payroll decrease was on the table during the merger, the significant layoffs, particularly at Neiman Marcus’ Dallas headquarters, made headlines. Finally, with some Saks and Neiman Marcus stores close to each other and serving the same customers, deciding which ones should survive will be challenging, and exiting leases may be more costly and complex than anticipated.

Mounting challenges are exacerbated by the luxury slowdown:

• Saks Fifth Avenue sales fell 16% in Q1 2025, and combined Neiman Marcus and Bergdorf Goodman sales dropped 10% while Bloomingdale's saw 10% growth. Operating in the more favourable accessible luxury price bracket, underlying growth, Nordstrom and Bloomingdale’s have upped their game with new brands, installations, events and services designed to entice.
• Saks faces vendor payment issues for months, with $275 million in overdue bills. CEO Marc Metrick assured vendors that overdue payments would be settled in 12 instalments starting July 2025. New payment terms were announced (90 days from the receipt of inventory for all future orders), causing tension with suppliers, some pausing shipments and others filing lawsuits. However, in August 2025, many suppliers remained unpaid. These methods raise concerns among Neiman Marcus suppliers, putting at risk the stores' procurement as it diverges from the industry-standard 30-day payment terms.
• Customer service has deteriorated, with increasing complaints about damaged deliveries and delayed refunds, coinciding with significant cost-cutting measures.
• The company's attempts to streamline operations through store closures and workforce reductions have further complicated its market position.
• Recent financing efforts highlight ongoing liquidity concerns.
• Last but not least, luxury brands, the very essence of both department stores, are wary of Amazon's involvement.

Now what: Saks' balancing act 

Mounting debt, risky financing 

Saks is in a weak financial position. The company borrowed heavily to fund the acquisition of Neiman Marcus, and it now faces a cash crunch. In May 2025, the company had secured $350 million in financing to stabilise its operations and cope with interest payments. But mounting pressures have required additional funding, especially as Saks recorded a US$100 million loss in FY 2024. No later than June 2025, Saks secured a new $600 million debt arrangement with existing lenders, providing an immediate $300 million loan, with potential for an additional $300 million through a debt exchange. Also, the company's bonds have faced significant pressure, trading at record lows of 34.5 cents on the dollar, reflecting market concerns about its financial stability. In July 2025, the company's financial weakness led to a credit rating downgrade from S&P Global Ratings from CCC+ to CC and concerns about its $600 million financing transaction. S&P believed the company’s market position would further weaken, as illustrated by the new downgrade to CCC- in September 2025. Additionally, interest expense to cover the debt loan is expected to reach approximately $400 million over the next 12 months, which will come on top of overdue payments to vendors and new merchandise, S&P said. A reason enough to announce just days later that the company considers selling a stake in Bergdorf Goodman to inject much-needed capital and restore confidence among stakeholders. However, the sale might be challenged by the fact that only the retail operation, not the Fifth Avenue property, is considered.

When it comes to cost saving, the company projected $600 million in annual synergies over five years, with $285 million expected by the end of fiscal 2025. Illustrating this, Saks Global transitioned from four different purchase order and supply chain systems to one in early September 2025, marking a first and significant streamlining effort. However, the handover resulted in $110 to $180 million in cancelled orders, with no assurance that they can be fulfilled during the critical holiday period.

How brand reductions threaten Saks’ fashion credibility 

In May 2025, Saks announced plans to eliminate 500 to 600 brands while increasing focus on strategic brand partnerships and aiming to achieve 20% of sales from higher-margin private label products. This reduction will include brands that Saks is dropping, as well as those that choose to discontinue their relationship with the retailer. While it makes sense to increase the private label share, eliminating brands can put the assortment diversity at risk. A product offer rationalisation is probably needed, but Saks must maintain the retail diversity, flair, and excitement that luxury shoppers need, with curated assortments mixing emerging labels and established global brands. Additionally, delayed vendor payments make this crucial requirement increasingly difficult to fulfil, as independent and small brands are particularly affected, many of which are lacking the cash reserves to absorb payment delays.  

Trading prestige for volume 

Reflecting the company’s current weakness, Saks let Nieman Marcus’ super personal shopper to the stars, Catherine Bloom leave for Nordstrom, probably taking more than $10 million in revenues with her. She is set to launch an innovative 350 sqm Catherine Bloom for Nordstrom private shopping destination in Los Angeles’ Melrose Place, bringing her eight-person team and decades of luxury retail expertise with her. In September 2025, veteran shoe force Will Cooper exited the company.

Also, Saks has undercut its status as a luxury player by partnering with less premium retail partners. Not only has Saks created a presence on Amazon, but the company has plans for the Saks men’s private brand to debut at Costco (with plans to extend to women's), raising concerns about brand dilution and questioning whether customers will continue to shop high-end brands at Saks when the nameplate is available at Costco. The deal emerges from Centric Brands, a division of Authentic Luxury Group, which will oversee the development and production of the Saks-branded merchandise for Costco. This move may weaken long-term strategic positioning at a time when Saks should allocate resources towards innovation and a clear brand story.

Authentic Luxury Group: A beacon of hope? 
Authentic Luxury Group aims to expand luxury brands like Hervé Léger, Judith Leiber Couture, Vince and Barneys New York globally. The latter should see the rollout of retail locations or in-store shops, expansion of existing brand categories, and wider distribution both in the US and abroad. Besides luxury retail, Authentic Luxury Group plots hospitality, travel, experiences and entertainment, reflecting a broader shift in luxury as fashion volumes decline. While this diversification becomes essential to generate new revenue streams beyond apparel, the project leverages the partnerships with Amazon and Salesforce to scale both online and offline. Also, Authentic Luxury Group could help shift power from vendors to retailers, driving higher margins, tighter control, and exclusivity. In May 2025 at the World Retail Congress, Authentic Brand Group CEO Jamie Salter and Saks Global chairman Richard Baker emphasised distribution, data, and customer experience as cornerstones of growth.  


Barely a year into its new chapter, the newly consolidated Saks Global stands in a curious position, being both a 158-year-old institution and a new experiment in platform retailing. While most retail mergers (50%+) fail outright, this one is, to some, a ‘last man standing’ strategy rather than visionary merchant leadership. Saks Global finds itself on unstable ground, with media coverage amplifying challenges that often overshadow the company’s strategic ambitions and fuel scepticism about its future. While Saks' history is a succession of mergers, consolidation alone doesn’t guarantee customer loyalty and credibility with brands. Neither does it guarantee the survival of merging companies, as exemplified by Proffitt’s locations ultimately converted into Belk stores, for example. Also, efforts to chase volume with Amazon and Costco risk undermining Saks’ luxury positioning at the very moment it needs to reinforce it. Whether it can move from survival mode to market leadership will determine if Saks Global becomes a new blueprint for luxury retail, or just another cautionary tale of overreach. Too big to fail or not, the actual test begins now.  

Credits: IADS (Christine Montard)