Dive Brief:
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Saks Global has eliminated an unspecified number of roles following its $2.7 billion acquisition of Saks Fifth Avenue rival Neiman Marcus, a company spokesperson confirmed by email Tuesday.
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“We are continuing the integration process following our recent acquisition of Neiman Marcus Group by consolidating functional leadership, clarifying key decision makers and beginning to simplify our organizational structure,” the spokesperson said.
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It’s the latest round of layoffs attributed to the deal: In July the company also confirmed job cuts, saying it was “bringing together operational functions from across the businesses under one strong leadership team.” Later that month, the off-price Saks Off 5th business shook up its merchandising team.
Dive Insight:
The downsizing at Saks Global comes amid declining sentiment among its own customers.
Fewer luxury consumers feel “calm” or “optimistic” about the economy than they did a year ago, according to the Saks Global Luxury Pulse survey, released Monday. A majority (65%) are optimistic about their personal wealth, though that’s a 5 percentage-point drop compared to last year. Despite the mounting pessimism, Saks found that nearly 60% say they plan to spend the same or more on luxury items in the next three months than they did in the previous three months.
The company could use the revenue. Sales declines there accelerated last year compared to 2023, according to Bloomberg Second Measure consumer-transaction data, with the off-price business falling more than twice as much as at full-line Saks Fifth Avenue.
“This could be related to Hudson's Bay's financial problems and executives' focus on efforts to acquire Neiman Marcus,” Bloomberg Intelligence analyst Mary Ross Gilbert said in a research note this week, in which she described Neiman's sales as “more resilient” than Saks.
Late payments to vendors have also hurt revenue as many have withheld shipments, S&P Global Ratings analysts said in December. A Feb. 14 memo to suppliers from CEO Marc Metrick meant to provide clarity appears to have backfired and raised questions about the company’s prospects.
Store closures have contributed to the sales downturn, Bloomberg’s Gilbert also said. The company may be able to avert one closure, announced last week, of Neiman Marcus’ iconic downtown Dallas flagship. On Tuesday, a coalition of civic leaders said they are committed to keeping the location open and expressed optimism that a deal with a landlord could be reached.
Saks Global has not commented on the possibility. The company previously said it was closing the store reluctantly, after a breakdown in lease negotiations with the owner of a parcel of land beneath the building.
