Canadian retailer Hudson’s Bay Co. will buy luxury department store rival Neiman Marcus for $2.65 billion US, the company said Thursday.

The deal was announced after months of speculation that HBC would buy the chain, whose website lists 36 U.S. locations selling designer apparel, accessories and housewares.

HBC plans to group Neiman Marcus with its other international assets, including Saks Fifth Avenue and Bergdorf Goodman, into a new entity called Saks Global. Those labels will continue to operate under their existing names.

HBC is positioning Saks Global as a collection of international high-end brands.

“We’re thrilled to take this step in bringing together these iconic luxury names,” said Richard Baker, HBC’s chief executive, in a press release.

As for Hudson’s Bay itself, the company says it intends to re-establish HBC’s Canadian business of stores and online retailing as a stand-alone entity, taking on less debt and relying more on cash.

HBC has spent recent years working to revamp its operations after closing its home decor chain Home Outfitters in 2019, the same year it sold department store chain Lord & Taylor to fashion rental subscription company Le Tote Inc.

Amazon’s inclusion ‘makes this deal interesting’, analyst says

“When it applies to Hudson’s Bay Company specifically, I haven’t seen really the presence of any retail strategy, including even the most basic elements of customer service and store operations and maintenance,” said retail analyst Doug Stephens in an interview with CBC News.

Stephens said he’s most intrigued by one aspect of the arrangement: Amazon has invested a minority stake in Saks Global as part of the deal, as well as software company Salesforce.

“Amazon has been trying to beat down the door of luxury for at least the last [six] to seven years. They’ve been making a really concerted effort to try to crack the luxury market, but have been unsuccessful,” he said.

Department stores have also struggled to perform online as businesses shift to e-commerce, he noted.

The marrying of HBC, Amazon and Salesforce, the last of which could help the company manage customer relations and improve brand loyalty, “makes this deal interesting to me,” Stephens said.

The Wall Street Journal first reported the Neiman Marcus deal Wednesday.

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