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Department store wars: Is Hudson's Bay eyeing Neiman Marcus?

By Don-Alvin Adegeest

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Business

American department store group Neiman Marcus is in a pickle. The company has seen its sales nosedive and savvy shoppers are no longer loyal to the once leader of luxury fashion.

The company, based in Dallas, Texas, can only solve its problems with either a huge investment or putting itself up for sale, and it appears the latter may be the most realistic.

Rumours are circulating that the Canadian department store giant Hudson’s Bay Company, or HBC, is the leading interested party, and could acquire the business as early as the end of April this year.

Hudson Bay Company has huge cash reserves

HBC has huge cash reserves, and is already the owner of US rival Saks Fifth Avenue and Lord & Taylor as well as German department strore group Galeria Kauphof and the former Dutch chain Vroom & Dreesman, which it intends to turn into its own brand stores in the second half of 2017.

Neiman Marcus and HBC are polar opposites on the luxury spectrum, leaving many wondering the direction HBC will take should it acquire the company. Whereas Neiman Marcus, along with its portfolio store Bergdorf Goodman, are seen as America’s most prestigious luxury retailers, the Hudson Bay Group is your average mid market store, with price-driven brands taking precedence over luxury.

HBC has been on a buying spree of late, and earlier this year showed interest in buying US chain Macy’s, which includes one of New York’s iconic flagships. Macy’s also owns the Bloomingdale’s Chain, meaning HBC could be the parent company of five American department store businesses if it successfully completes all of its takeovers.

Hudson’s Bay is North America’s oldest retailer, founded in 1670 as a fur trading company. Neiman Marcus was founded in 1907, becoming a public company in 1987 after successfully deferring a hostile takeover bid. This time round, however, it looks as if it can’t avoid being bought.

HBC’s major competitor in the luxury market is another Canadian business owned by the Weston family. Galen Weston formed the Selfridges Group in 2003, which has been less aggressive in its acquisitions, carefully expanding its portfolio with only luxury retailers, including Canada’s Holt Renfrew, Holland’s de Bijenkorf and Ireland’s Brown Thomas retail stores.

Photo credit: Andreas Praefcke via commons.wikimedia.org

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