An iconic Canadian retailer has reached a deal to buy another iconic American retailer. According to the Wall Street Journal and the New York Times, Toronto-based Hudson’s Bay Company will pay USD$2.65 billion for the US retailer that specializes in selling designer apparel, accessories and housewares.Hudson’s Bay is Canada’s oldest company, founded in 1670. It also owns Sak’s Fifth Avenue and Saks Off Fifth.Neiman Marcus was founded in Dallas in 1907 and operates 36 stores throughout the lower 48, while HBC has 86 outlets in Canada. More than 40% of HBC outlets, or 34 of those, are in Ontario.Analysts said the cross border consolidation is a sign of declining foot traffic amid a resurgence of online shopping, high inflation and changing consumer habits as a result of the pandemic.According to the New York Times, Amazon and Salesforce will purchase minority stakes in a new company that will be rebranded ‘Saks Global’. The report went on to say the companies intend to use technology and artificial intelligence to bolster sales.But that might not be the main driver of the deal. Analysts described HBC as primarily a real estate company first and a retailer second. They pointed to synergies in distribution facilities and personnel..Neither HBC nor Neiman Marcus commented on the deal. An official announcement is expected as early as tonight.In 2019 it closed the Home Outfitters chain of stores. In March 2022, Hudson's Bay closed its massive and historical Toronto store, firing over 600 employees while citing COVID-19 lockdown pressures.In January of last year it axed 2% of its workforce and closed more locations, including the iconic store in Banff.Meanwhile, Neiman Marcus declared bankruptcy in 2020 and has operated under Chapter 11 receivership ever since, shedding billions in debt. Analysts said that was a likely catalyst for the deal.
