Saks Fifth Avenue’s acquisition of Neiman Marcus could be the future of U.S. luxury retail

Saks Fifth Avenue’s recent acquisition of Neiman Marcus marks a pivotal shift in America’s competitive landscape of luxury retail. The creation of Saks Global as the parent company of both brands has immediately elevated its market presence, positioning it as the second-largest player in the luxury department store space by visit share. While Nordstrom continues to dominate the segment with 68.4 percent of combined visits in 2024, Saks Global’s combined 16.8 percent share, driven by the integration of Neiman Marcus, now exceeds Bloomingdale’s 14.9 percent. This merger offers Saks not just a quantitative boost in traffic, but also qualitative gains, expanding its reach into new and more affluent consumer segments, according to insights from Placer.ai.

The deal gives Saks Global access to a more upscale clientele. Data from Q4 2024 reveals that the median household income (HHI) of Neiman Marcus’s captured market was 112,800 dollars per year, roughly 10,000 dollars higher than Saks Fifth Avenue’s 102,900 dollars. This difference is significant in the context of luxury retail, where household income is a key determinant of purchasing power. The more affluent Neiman Marcus audience enhances Saks Global’s potential to expand in the premium and exclusive luxury space, a crucial factor as it rolls out its Authentic Luxury Group initiative aimed at upscale brands like Barneys New York.

The acquisition also diversifies Saks Global’s customer base by bringing a more family-oriented audience into its fold. In Q4 2024, 26.2 percent of Neiman Marcus’s visitors came from households with children, compared to just 23.7 percent for Saks Fifth Avenue. This family-focused segment aligns with broader demographic trends and may create new opportunities for product categories catering to family life—such as home goods or children’s fashion—which have typically been underrepresented at Saks.

Timing and seasonal shopping patterns further underscore the strategic benefits of the merger. Neiman Marcus has historically performed exceptionally well during the holiday season, capturing its largest share of visits in Q4, when compared to Nordstrom, Saks and Bloomingdale's, Placer.ai says. In contrast, Saks Fifth Avenue experiences a more muted holiday boost. By absorbing Neiman’s strength in this critical retail period, Saks Global can capitalize on increased traffic and sales during the most important quarter of the year.

Moreover, the merger offers potential for real estate consolidation and operational efficiencies. Many Saks and Neiman Marcus locations are in close proximity, raising the possibility of rationalizing the store network while tailoring each brand’s positioning to local market demands. With Saks traditionally focusing on urban luxury and Neiman Marcus appealing to a broader spectrum of affluent consumers, Saks Global is well-positioned to differentiate the two banners and maximise their combined market potential.