He added that Saks and Neiman’s have each carved out their own space in the retail environment.  “There may be crossover in many of the brands they carry, but they are merchandised differently and specifically for the Saks consumer, and the Neiman’s consumer, who are different from one another,” said Wassner.

“Neiman’s is very strong in clienteling, and has focused on the upper tiers of the luxury market for the past few years. Saks and Neiman’s have different approaches to consumer acquisition and retainage. Saks has a very strong contemporary business, as well as a healthy luxury business, contingent upon store locations. This merger will give Saks Global the opportunity to further distinguish one flagship from the other, in a strategic and thoughtful way,” he said.

Vendors Express Cautious Optimism

Quinn is among the vendors waiting to see what the deal’s impact will truly be.

“We are optimistic,” said Emilie Rubinfeld, president of Carolina Herrera. “Saks Global is a bold new platform to reinforce luxury retail in the U.S. Bringing together Saks, Neiman Marcus and Bergdorf Goodman, three iconic destinations for the best-in-class products and services is an opportunity for discerning consumers to continue to find and discover a curation of brands from the local store and associates they know and trust.

“We are hopeful that Saks Global will sustain and even bolster the U.S. position as the leading luxury retail market in the world,” Rubinfeld said.

Jane Siskin, cofounder and chief executive officer of Cinq à Sept, commented on the upside of the deal. “The Saks-Neiman’s deal can present many opportunities for the luxury department store sector. Both companies have unique geographic and demographic positioning, and combining the two makes sense.

“We are monitoring this closely to see when and how the deal plays out, but we’re excited about the possibilities. For now, we’ll continue to manage the business as usual, remaining focused on serving our shared consumers,” Siskin said.

Ronny Kobo, a contemporary designer, said, “The next year or so will tell,” the impact on vendors. Discussing vendor overlap, she said her collection retails well at both Saks and Neiman’s, “but yes, it is a concern for the future.” She believes the deal is likely going to free up real estate, noting that in malls where both have stores, “one will probably go.”

Jeff Rudes, chief executive officer of L’Agence, said, “It’s too soon to comment. Let’s see how things unfold with an obvious consolidation and how it makes sense for everyone involved. Our business is stellar with both so we should gain a stronger position if there is a merger.”

Meeting the Moment

Tanya Golesic, CEO of Mackage, said, “This acquisition combines the strengths of two iconic brands. Mackage is committed to maintaining strong retail partnerships and we look forward to the growth opportunities this new environment offers.”

Quinn said she definitely sees the upside of the deal. “If you don’t change, you’re going to be left behind. Today everybody’s focusing on profitability. You have to make money to stay in business,” she said.

That sentiment was echoed by others in the industry, including adviser and investor Andrew Rosen.

“The world has changed a lot since Neiman Marcus and Saks were founded, and who would ever imagine 25 years ago, that every one of Saks and Neiman’s biggest suppliers is also their competitor?” he said.

Distribution channels, consumer engagement and the way people shop is different today, he said. “We lost one of the most important stores four years ago — Barneys closed its doors — and no one ever looked back. The world evolves, fashion evolves, consumers shopping patterns evolve, and this is just part of the evolution,” he said

“[Both companies] have an incredible heritage, but in the world that we live in today, I don’t know how many more stores we need that duplicate and cater to the same customer in the same way. This is something that’s going to be a very good thing for the industry, but it’s not going to be without pain and disruption,” he said.

He believes the merger will create a “healthy retail ecosystem.”

“We’re seeing the disruption all over. Look at what’s happening with the pure play e-comm guys. That is a messy, messy, messy world,” Rosen said.

“In every industry we have seen this. Look at what Netflix has done. Look what AI is doing. Look at where the world is going. Why would we think that things should stay the same in the retail world? Change is hard. But change is also necessary,” Rosen said.

Combining the Companies

Industry insiders speculated that some stores could close in the future, pointing out that Saks and Neiman Marcus both have stores in eight malls.

“That could happen,” Burke said. “Neiman’s is really strong in certain markets, and Saks is really strong in certain markets. There could be consolidation there.”

Wassner said, “The malls where both a Saks and a Neiman’s exist are malls where both chains are profitable and thriving. There shouldn’t be any need to consolidate the number of stores for competitive reasons.”

Rosen said he doesn’t feel the combined entity will squeeze brands or impact their negotiating power.

“I don’t think business is done by strong-arming anyone. Business is done in the truest sense of partnership because the Saks-Neiman’s combination is going to need the best product from the best designers and resources possible, and likewise, the brands are going to need the new reinvigorated Neiman’s and Saks. I don’t see it as anyone taking advantage of anyone else. I don’t think this new entity is going to strong-arm anyone,” Rosen said.

But Burke believes that brands could feel the squeeze with so much power in the hands of the combined entity. “It could. There’s no doubt about that. But in the end, you want brands to succeed because you can’t just have brands as concessions. You need them at a number of different price points. The majority of Saks’ business is not made up of just luxury brands. More of Neiman’s is made up of luxury brands. It’s kind of in the best interest for them to make sure the brands succeed and flourish,” Burke said.

Buying staff and fashion directors could be kept separate too, in certain situations, Burke suggested.

“Bergdorf’s is a bit of a unique situation and always has been. That’s a different approach,” he said. “As far as Neiman’s and Saks, there’s certainly going to be efficiencies to be had. I tend to think that will initially be back of the house. The customer is paramount here. There are a group of very devoted Saks clients, and there’s also incredibly devoted Neiman’s clients. Why risk making them choose one or the other?”

Going forward, the combined company has expansion opportunities, Burke said. “We have to wait and see what the strategy is that they announce for Saks Global. I do think that there’s certainly an opportunity for Saks and Neiman’s in Saudi Arabia, in Asia and Europe. When you go into the world outside the U.S., there are not that many multi-brand department stores that have the cachet of Saks or Neiman’s.”

“Hopefully, it’s a positive thing that Saks Global will use their investment to grow the brands. And who knows what Amazon has in their minds? They’re pretty creative people,” Burke said. “They haven’t had a real success when it comes to fashion.…With Farfetch having its issues and everybody else having their issues, maybe they [Amazon] have a strategy as well,” Burke said.

“Amazon technologically is clearly, if not the most advanced, one of the most advanced consumer-serving platforms that exist,” Rosen said. “It can’t be bad. They treat the consumer in a first-class way.”

For the most part, it doesn’t appear that Saks, Neiman’s or Bergdorf is courting the younger Millennial. “That could be an opportunity as well,” Burke said.

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