Following months of negotiations and years of attempted mergers between the two department store players, Saks Fifth Avenue parent company HBC is acquiring Neiman Marcus Group for $2.65 billion. Once finalized, the deal will establish Saks Global, a retail group consisting of more than 150 Saks Fifth Avenue, Saks Off 5th, Neiman Marcus and Bergdorf Goodman stores in the United States. The group’s total real estate assets are valued at $7 billion and its annual sales volume is $10 billion. At least for now, each retailer is continuing to operate under its own brand name.

In an unexpected move, Amazon emerged as a party to the deal. The giant e-commerce company is taking a minority stake in Saks Global and will provide it technological and logistical capabilities. Salesforce is taking a minority stake, too. The deal is awaiting approval from the United States Federal Trade Commission.

Saks Fifth Avenue’s pickup of Neiman Marcus is occurring from a position of weakness as department stores have floundered with Americans turning elsewhere for purchases. Both companies have tried several unfruitful tactics to achieve better results. Saks Fifth Avenue, for example, spun off its e-commerce business in search of profitability in 2021. Two years later, sales across its stores declined 15% in the year ending in April, and e-commerce sales decreased 8% in the same period.

Also in 2023, HBC raised $340 million through a series of real estate transactions after it was reported Saks Fifth Avenue was withholding payments to vendors. Saks Fifth Avenue’s generated $6 billion in sales last year, double the amount it generated a decade earlier when it was bought by HBC for $2.9 billion.

In 2020, Neiman Marcus was acquired out of bankruptcy, which enabled it to shed $4 billion in debt from its balance sheet, by Davidson Kempner Capital Management, Sixth Street Partners and Pacific Investment Management. It received a $200 million investment from British e-commerce marketplace Farfetch in 2022 aimed at boosting its digital platform. The partnership ended following Farfetch’s sale to South Korean e-commerce company Coupang in a transaction completed in January.

For the three-month period ending October last year, Neiman Marcus’s sales dipped to $948 million from $1.034 billion from the same year-ago period. Meanwhile, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) fell to $95 million from $112 million.

Whether Saks Fifth Avenue’s assumption of Neiman Marcus gives department stores a lifeline or is merely a conversation starter on the way to their death is yet to be seen. To get a sense of what people in the know think about it and the ripple effects for the beauty business, for the latest edition of our ongoing series posing questions relevant to indie beauty, we asked nine retail consultants, brand strategists and investors the following questions: What do you make of the Saks Fifth Avenue/Neiman Marcus deal? How will it impact the luxury beauty market? Will it strengthen the declining department store sector?