The Hudson's Bay Company, the parent of Saks Fifth Avenue, has agreed to acquire rival Neiman Marcus for $2.65bn, Reuters has reported.

The deal will merge two of the major players in luxury retail sector, creating a new entity named Saks Global.  

The combined company will have a total of 75 stores, including two Bergdorf Goodman locations, and 100 off-price outlets. 

Saks Global will be led by Marc Metrick, the current CEO of Saks and Saks.com.  

The acquisition is set against the backdrop of a challenging environment for luxury retailers, who face slowing demand after the initial post-pandemic boom.  

The New York Times quoted Marc Metrick: “Saks has remained steadfast in our commitment to be at the forefront of luxury fashion, meeting customers not just where they are but where they are going.  

"Together, with our ongoing focus on innovation, we are primed to drive growth for our brand partners and create career development opportunities for the incredible talent across Saks Global."  

The boards of Hudson's Bay Company and Neiman Marcus have approved the transaction, with an official announcement expected soon.  

The acquisition is being financed by the Hudson's Bay Company with $2bn raised from existing investors.  

Affiliates of Apollo Global Management are providing $1.5bn in debt.  

In April 2020, Neiman Marcus announced a plan to file for bankruptcy protection, but successfully emerged from voluntary Chapter 11 protection in September of the same year. 

The luxury department store chain revealed plans to cut around 5% of its workforce in February 2023, as part of a strategic realignment.